As Media Groups Consolidate, Group Nine Eyes Future Acquisitions
Group Nine Media Considers Forming Blank-Check Company
Over the past several weeks Group Nine Media, the company behind websites like The Dodo and NowThis, has considered forming a blank-check company that could help the media group acquire some of its smaller competitors. The media group is interested in growing its audience and getting an upper hand in negotiations with online advertisers. Group Nine Media executives have already consulted with advisers about their desire to form a special-purpose acquisition company.
Special purpose acquisition companies, also referred to as SPACs or blank-check companies, are formed specifically to raise capital by going public. That capital can then help a company make deals and acquire smaller companies.
Behind Group Nine’s Growth
Group Nine Media is part of the quickly consolidating digital media sector. The company was formed through a merger of several smaller businesses in 2016. Since then it has purchased even more digital media competitors. Last year Group Nine acquired PopSugar’s website and properties in an all-stock deal that valued Group Nine at $600 million.
The media group has developed a reputation for news, travel, and animal videos that spread quickly and widely on social media. The group’s holdings include PopSugar, The Dodo, NowThis, and Thrillist.
Reflecting the Sector’s Consolidation
Group Nine is not alone in focusing on digital media acquisitions that could lead to larger audiences. Just last month, BuzzFeed announced plans to buy HuffPost from Verizon Media (VZ) in an all-stock deal that will marry two of the largest digital media companies. Last year Vice Media Group acquired Refinery 29 and Vox Media merged with New York Media, the publisher of New York Magazine.
These acquisitions could help the media groups compete for ad sales against tech giants like Facebook (FB) and Google (GOOGL). While advertising budgets have flagged during the coronavirus pandemic, media groups hope sales will recover in the near future.
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