NEW YORK (NYTIMES) - Vox Media has agreed to buy Group Nine Media, a deal that will combine two large digital media publishers as the industry consolidates further, the companies said Monday (Dec 13) night.
Mr Jim Bankoff, the chief executive of Vox Media, said Monday that the combined companies would be "considerably larger than the sum of the parts". He will be the CEO and chairman of the publisher, which will keep the Vox Media name, while Mr Ben Lerer, the founder and CEO of Group Nine, will join the Vox Media board, the companies said.
Vox Media, co-founded by Mr Bankoff in 2011, is the publisher of Vox.com, The Verge and SB Nation, as well as New York magazine and its related websites, which it bought in 2019. Group Nine operates the lifestyle sites PopSugar, NowThis, the Dodo, Thrillist and Seeker.
The combined company, encompassing nearly 350 million social media followers and six billion monthly video views, is expected to generate more than US$700 million (S$960 billion) in revenue and US$100 million in pre-tax profit next year, according to two people familiar with the financial details.
Mr Lerer said that his discussions with Mr Bankoff started in earnest this summer. Group Nine had held previous discussions with Vox Media and other companies about a merger through a special purpose acquisition company, or Spac, that it had created with the intention of going public.
"I felt I got an unbelievable education, not just sort of skin deep, but actually got to see inside of so many companies," Mr Lerer said, adding: "It was clear that Vox was the best, I would say by really head and shoulders."
The deal, signed on Monday night, is an all-stock transaction that is expected to close early next year. The terms were not disclosed. The new Vox Media would be among the largest media companies in the United States, with about 2,000 employees, Mr Bankoff said, adding that Group Nine's websites complemented Vox Media's as its audience was younger.
"Group Nine is extraordinary at social, where there is so much growth," Mr Bankoff said. "Vox Media is, for instance, extraordinary at podcasting and has a big presence across our websites." Both companies, he said, have robust studio divisions: "I don't think there is a major premium streaming service that we're not in business with."
Digital media companies have been looking for ways to pay back investors and compete with Google and Facebook, which dominate online advertising. Recent consolidations include BuzzFeed's purchases of HuffPost and Complex Networks, and Vice Media's acquisition of the lifestyle publisher Refinery29.
And Vox Media may not be done making moves, either through further acquisitions or by going public, Mr Bankoff said. "Going public may or may not make sense based on market conditions and other factors, and we'll continue to look at that," he said. The Wall Street Journal first reported on advanced talks between the two companies.
BuzzFeed, known for its social-media-ready lifestyle journalism and hard news reporting, went public on Dec 6 by merging with a so-called blank-cheque company. The results have so far been disappointing: Its stock, which opened on the first day of trading at US$10.95, closed on Monday at US$6.25.