Vox Media, owner of New York magazine, the Verge and Vox, has inked a deal to buy Group Nine, home to Thrillist, The Dodo and NowThis, creating a new digital media juggernaut.
Terms of the all-stock deal were not disclosed late Monday. Vox Media shareholders will own approximately 75 percent of the company, with Vox Media CEO Jim Bankoff running the combined company. Group Nine Media shareholders will own about 25 percent, according to Axios. The digital media publishers said the merger is expected to close in early 2022.
The deal isn’t completely surprising, as both companies had contemplated going public through special purpose acquisition companies or SPACs. But the SPAC market has cooled and digital media publishers still need to find ways to increase their size in order to attract new ad dollars.
In joining forces, Vox Media and Group Nine will create a mega company of about 2,000 employees, and offer marketers bundles to advertise across its various properties, which span from news, tech and sports to lifestyle, culture and politics.
According to the Wall Street Journal, the combined company is projected to generate more than $700 million in revenue in 2022 and more than $100 million in profit.
After news of the deal broke Monday, Bankoff circulated a memo to staff, addressing fears of widespread layoffs and massive editorial changes.
“None of our existing editorial offerings or services will change as a result of this combination and we will be thoughtful about how we make decisions and treat people,” he said.
Bankoff turned to the future of the mega-company, adding that “we have no immediate plans to go public, although we’ll always continue to evaluate opportunities that are in the best interest of all of our stakeholders, including our employees.”
Under the terms of the deal, Group Nine founder and CEO Ben Lerer will join the board of Vox Media. Discovery, Group Nine’s largest minority investor, also will get a seat on the new company’s board.
“With this acquisition, Vox Media will extend its leadership into new categories, formats and distribution platforms by welcoming more beloved properties into our portfolio,” Bankoff said in a statement.
“There is no one I would trust more to lead this company and the team I love than Jim,” Lerer said in a statement. “He is not only kind and fair, but fearless and focused. This is the beginning of our most exciting chapter.”
In recent years, Vox has been on an acquisition spree, buying New York Media, publisher of New York Magazine, and digital properties such as The Cut, Eater and Vulture, in an all-stock deal in order to gain scale and cost synergies.
Vox Media has made a whopping four other acquisitions this year: Cafe Studios, Preet Bharara’s podcast company; Punch, a media brand covering drinks and cocktail culture; Hot Pod, a publication covering the podcast industry; and narrative podcast studio Criminal Productions.
Group Nine was formed as a roll-up play in 2016, which combined digital media sites Thrillist, The Dodo, NowThis and Seeker. Group Nine subsequently bought comedy studio JASH and female-focused lifestyle brand Popsugar in 2019.