BuzzFeed Going Public Via SPAC Merger: What Investors Should Know

Digital content and commerce company BuzzFeed is going public in a SPAC deal bringing a portfolio of brands aimed at millennials and Gen Z to the market.

The SPAC Deal: BuzzFeed is merging with 890 Fifth Avenue Partners Inc ENFA in a deal valuing the company at $1.5 billion.

As part of the merger, BuzzFeed is also acquiring Complex Networks for $300 million.

The merger is expected to close in the fourth quarter with the company changing to the name BuzzFeed Inc and with the ticker BZFD.

Public shareholders of ENFA will own 16.9% of the company after the merger.

About BuzzFeed: With its owned brands, BuzzFeed is a leader covering several key sectors in digital media.

The company’s key brands include BuzzFeed (entertainment/culture), Complex (entertainment/culture), BuzzFeed News (news), Huffington Post (news) and Tasty (food).

Emerging brands for the company include As/Is (beauty), Bring Me (travel), Goodful (health), Nifty (home) and Playfull (family).

The company ranks No. 1 in market share for time spent by Gen Z and millennials. Over 73% of this target market reads content from the company’s brands each month.

The company’s brands get 806 million minutes from visitors monthly.

BuzzFeed has grown through a series of acquisitions including Huffington Post in 2020.

The company has partnerships with Verizon Communications Inc. VZ and Lions Gate Entertainment Corp (NYSE: LGF-A)(NYSE: LGF-B).

Related Link: Buzzfeed In Talks To Go Public In Merger With 890 Fifth Avenue SPAC

Growth Ahead: BuzzFeed plans to continue to leverage its strong brands and creators in media to help monetize its portfolio.

One area the company is focused on is growing its commerce revenue. The company sees this higher-margin business segment hitting 31% of total revenue by 2024.

The company’s partnership with Lions Gate could lead to content being turned into television and movies, diversifying the company further into the media segment.

Financials: The company is forecasting revenue to grow 24% year-over-year to $521 million in fiscal 2021 and 26% year-over-year to $654 million in fiscal 2022. Revenue is expected to grow at a compounded annual growth rate of 26% from fiscal 2020 to fiscal 2024.

BuzzFeed lists positive net earnings and sees growing EBITDA margins in the coming years.

Revenue was split 48% content, 41% advertising and 11% commerce in fiscal 2019.

ENFA Price Action: Shares of ENFA are up 1.02% to $9.88 on Thursday at last check.