Group Nine Media forms SPAC to raise funds from public markets
Group Nine Media, a digital media holding company, has reportedly formed an SPAC with an aim to raise funds from the public markets.
Sources familiar with the matter have stated that Group Nine is creating a SPAC with an objective to drive asset acquisition, capital stock exchange, merger, reorganization, stock purchase, and other similar business combination. The company has reportedly cited that it currently does not have any specific targets for acquisition or has not made any substantive discussions yet.
However, Group Nine has shown a high interest in digital media companies and industries like marketing, digital publishing, events, e-Commerce, and social media. Moreover, the company’s executives have been lending a strong focus on consolidating the digital media properties over the last few years.
As per the statement made by Jonah Peretti, BuzzFeed’s CEO, a consolidated digital media entity is likely to have more influence in negotiations with Google and Facebook. Additionally, the company recently entered an agreement to take over HuffPost from Verizon Media.
For the record, Group Nine is a roll-up of priorly independent digital media companies led by the Chief Executive Officer, Ben Lerer. The company has been rapidly expanding since its acquisition of PopSugar in 2019. Sources previously stated that it had been exploring a SPAC.
Group Nine’s statement further added that the company considers the digital media sector as a key to consolidation, as these digital media companies require a scaled platform with an efficient infrastructural portfolio to gain a competitive edge and deliver a long-term value to the shareholders.
SPACs, also known as blank check corporations, assemble managers, raise funds in public offering, as well as use the cash to purchase companies. Later, these companies inherit the stock exchange listing of SPACs without the need for a formal IPO. The recent announcement of Group Nine demonstrates the increasing allure of SPACs.
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