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Vox Merges With Thrillist, NowThis Owner Group Nine Media

Deal is not affiliated with Group Nine’s SPAC

(UPDATED at 5:20 p.m. PT)

Vox Media is merging with Group Nine Media in an all-stock deal, the company announced on Monday.

Group Nine owns NowThis News, Thrillist, PopSugar, Seeker and the Dodo. Vox Media maintains Vox, New York Magazine, Vulture, SB Nation and more. The deal is expected to close in early 2022. The deal is outside of Group Nine’s SPAC that was formed last year.

Vox CEO Jim Bankoff will serve as CEO of the combined company, with Group Nine CEO Ben Lehrer joining the company’s board of directors.

“Under Ben’s stewardship, Group Nine has navigated from a scrappy start-up to one of the biggest and most successful publishers in the industry. Much like us, their team has proven to be a leader in both building cherished media brands from the ground-up as well as successfully acquiring and integrating properties. With this acquisition, Vox Media will extend its leadership into new categories, formats and distribution platforms by welcoming more beloved properties into our portfolio,” said Bankoff. “Our combined company will be the premier home for creators, storytellers, journalists, product innovators and business people who want to grow their careers and have an impact through their work. This acquisition will build on and accelerate the leading creative and business strength that both companies already have achieved.”

“We could not be more excited about the opportunity to join forces with Vox Media. This combination will not only create unparalleled scale and revenue diversification, it will bring together some of the most popular brands, premium content, and creative and business talent in the world. There is no one I would trust more to lead this company and the team I love than Jim. He is not only kind and fair, but fearless and focused. This is the beginning of our most exciting chapter,” said Lerer.

The news of the deal first broke on Monday morning via the Wall Street Journal, which then obtained a staff memo from Bankoff. “Due to a leak, this news is breaking prematurely,” he wrote, “but I’m writing to share what I expect to be one of the most exciting and significant announcements in our company’s history. Vox Media is in advanced discussions to acquire Group Nine Media.”

LionTree acted as financial advisor to Vox Media, while White & Case LLP acted as its outside legal advisor. Code Advisors is serving as Group Nine’s financial advisor, while Latham & Watkins is serving as its legal advisor.

Since forming its SPAC last December, Group Nine has so far not used that route to go public. Similarly, Vox Media explored SPAC options this summer, but also has yet to make that jump.

Earlier this month, BuzzFeed became the first digital media company to go public, but just days in, is already showing signs of strain in its attempt to redefine itself in the space. Shares of BuzzFeed closed down 11% from its starting price last Monday, capping a disappointing first day of the digital media giant as a publicly traded company. (A representative for BuzzFeed told TheWrap at the time the company is “not going to focus on day-to-day fluctuations in stock price.”)

That less-than-stellar debut might be expected for any pioneer, but analysts think it could also be a warning to BuzzFeed’s peers, like Vox and Group Nine.

“Making a business strategy change when you’re a private company has its own struggles, but with the public investors and analysts’ eyes on them, as well, it will [prove even] more challenging,” Paul Roberts, founder and CEO of digital advertising firm Kubient, told TheWrap last week. “When you are a private company, you can figure these things out over time, but when making the move to being publicly traded, the executive team will have to answer to the public every 90 days, which will bring an entirely new set of circumstances and concerns.”

SPACs can also be a warning sign to potential investors. In a study that analyzed the performance of SPACs from 2019 to 2020, researchers found that while creators of SPACs did well, their investors often did not. In a SPAC, investors have the option to withdraw from a deal if they don’t like it, thereby redeeming their shares for cash invested plus interest. Researchers have found that the average rate of redemption per deal was 58%, and in more than a third of the SPACs in the study, more than 90% of investors pulled out.

The more traditional merger — which is familiar territory for digital media companies — is a safer bet for maximizing reach and revenue.