Vox Media and Group Nine Media are in advanced discussions to merge, in an all-stock deal that would give Vox Media a 75% ownership stake in the combined company — and create one of the industry’s largest pure-play digital media players.
The talks between Vox Media and Group Nine were first reported by the Wall Street Journal, which both companies later confirmed.
Vox Media CEO Jim Bankoff would become chief executive of the combined entity. “Due to a leak, this news is breaking prematurely,” Bankoff wrote in a memo Monday to staff after the Journal story was published. He said he expects the deal to officially close in early 2022, adding that it is “one of the most exciting and significant announcements in our company’s history.”
“The business rationale behind this merger is to grow revenue, increase scale, and combine these incredibly powerful and complementary portfolios,” Bankoff wrote in the memo. “Together we will be an even stronger, more financially sustainable company that can invest more in our products and our people.”
In 2019, Vox Media acquired New York Media, publisher of New York Magazine, in an all-stock deal designed to gain synergies of scale. The company’s brands currently include Vox, New York Magazine, The Verge, The Cut, Eater, Vulture, Polygon, Curbed, Grub Street, SB Nation, Intelligencer and Recode.
Meanwhile, Group Nine was formed as a roll-up play in 2016, with backers that included Discovery, combining digital media sites Thrillist, The Dodo, NowThis and Seeker; Group Nine subsequently bought comedy studio JASH and women-focused lifestyle brand Popsugar. The company is headed by Ben Lerer, founder of Thrillist and son of venture-capital investor Ken Lerer. Under the proposed merger between Vox and Group Nine, Ben Lerer would join the board of the new company.
Earlier this year, Group Nine established a special purpose acquisition company (SPAC) that raised $200 million, looking to acquire other digital media companies. However, the SPAC is not part of the merger deal on the table with Vox Media.
The combined company is projected to generate more than $700 million in revenue in 2022 and more than $100 million in profit, per the Journal report.
A team from Vox Media and Group Nine will “begin developing a thoughtful plan to integrate functions where it makes sense to do so,” Bankoff wrote in the memo. “None of our existing editorial offerings or services will change as a result of this combination and we will be thoughtful about how we make decisions and treat people.”
Bankoff also said that “we have no immediate plans to go public, although we’ll always continue to evaluate opportunities that are in the best interest of all of our stakeholders, including our employees.”
Separately, BuzzFeed went public last week through a SPAC merger, but has had a disappointing debut as a public company: Shares have dropped 36% since they began trading Dec. 6 on Nasdaq.