Forbes, one of America's oldest media outlets, is merging with Hong Kong-based Magnum Opus Acquisition Ltd, a SPAC run by Jonathan Lin, a former Point72 executive of billionaire Steven Cohen.
The deal will allow Forbes to invest more in creating consumer-focused products as the company reduces reliance on media revenue, Forbes Chief Executive Mike Federle said in an interview.
With print revenues falling, the business news outlet has doubled down on live events and leveraged its brand and reader base to create consumer products in areas including education and e-commerce. It reported $163 million in revenue in 2020 and expects it to grow to $193 million this year.
« We have created this audience and commercial scale with 150 million people. This funding will allow us to create bespoke products that address these different industry cohorts while focusing on direct-to-consumer conversion »
Headquartered in Jersey City, New Jersey, Forbes was founded in 1917 by BC Forbes, with his family retaining a minority interest. The magazine is run by his grandson, Steve Forbes, current president and editor-in-chief, who failed to run for US president in 1996 and 2000 in the Republican primaries.
The Forbes company was valued at $475 million when Hong Kong-based investment group Integrated Whale Media Investments bought a majority stake in 2014.
The company was also in talks with other bidders, including a consortium led by technology investor Michael Moe, which would have allowed it to remain private, Reuters reported https://www.reuters.com/business/media-telecom/exclusive- forbes. -pursues-spac-talk-amid-new-takeover-interest-sources-2021-04-29 in April.
With the SPAC deal, Forbes joins other media outlets, including BuzzFeed, which agreed to a blank check merger in June, and Vox Media, which is also reported to be pursuing such a merger.
In a sign of renewed interest in the deal in the digital media sector, German publisher Axel Springer said Thursday that it will acquire US political news website Politico.
The deal with Forbes is expected to generate $600 million in proceeds and includes a private investment in public equity of $400 million.
The unusually large PIPE comes at a time when the broader SPAC market has been hit by heightened regulatory pressure and saturated demand, with companies struggling to attract interest from major Wall Street institutional investors.
Forbes shareholders will own nearly 22% of the combined company, assuming no redemptions from Magnum investors, and the company will keep $145 million in cash. Magnum raised $200 million in a March IPO.
- SPACs raise funds in an IPO with the aim of merging with a private company, which then goes public.
- Once the deal closes, Forbes will list on the New York Stock Exchange under the ticker symbol "FRBS".
