The story follows reports that Vox Media Chief Executive Jim Bankoff sent a memo to employees this week confirming that discussions were ongoing and arguing the case for the merger.
The WSJ believes that the upshot is likely to be an all-stock transaction that would give Vox Media 75% ownership of the combined company, with the remaining 25% going to Group Nine Media. According to the WSJ’s insider the combined company is expected to generate more than $700 million in revenue in 2022 and more than $100 million in profit.
Of the many companies formed off the back of the social media-driven digital media boom a decade ago Vox Media, which owns vox.com and the sports website SD Nation has proved among the most robust. The company recently acquired cocktail website Punch and has been eyeing an IPO as a route to raising more cash. Although the experience of Buzzfeed, which recently went public via a SPAC and whose shares have lost around 40% of their value might mean that option is less likely.
Group Nine, which owns news outlet NowThis, lifestyle site Thrillist and animal-focused the Dodo has also apparently been exploring the SPAC option as a way of funding potential acquisitions.
In his note to employees Bankoff said “the business rationale behind this merger is to grow revenue, increase scale, and combine these incredibly powerful and complementary portfolios. Together we will be an even stronger, more financially sustainable company that can invest more in our products and our people.”