Vice Media, a major digital publisher with a youth focus, has announced that it’s negotiating a merger with an acquisition company. The Wall Street Journal reports that the deal, if it goes through, could be worth $3 billion. The valuation is nearly half of the $5.7 billion that Vice was valued at 4 years ago.
The publisher had just acquired a capital infusion of about $450 million from TPG Capital and was seen as a huge front runner in the race to conquer digital news publishing. But it seems things have not worked out as planned. These recent reports indicate that Vice is looking to merge with 7GC & Co via a SPAC deal, a company owned by former Morgan Stanley executive Jack Leeney.
If indeed the merger goes through, the new company would see significant shareholding go back to Vice’s current investors. The digital publisher had done well to attract a lot of heavy names including Walt Disney, A & E Networks, and of course TPG Capital. The WSJ notes that Vice's current shareholders would own potentially up to 75% of the new company if indeed the merger is successful.
It’s important to keep insisting on the “if” as far as this merger goes. Although there has been a strong intent for both companies to come together, nothing has been agreed on yet. And besides, mergers can be slow and it will take a lot of effort to make them happen. But reports indicate that Vice will be pitching its Vice Studio, its film and TV production arm as part of the deal.
The digital publisher will also bring its women-focused brand Refinery29 to the table in an effort to make the merger happen. Under the proposal, current Vice CEO Nancy Dubuc will remain at the helm of the new company. The founder of Vice Shane Smith is also expected to retain his executive chairmanship.
Other than that, there is still very little we know about the deal. But so far, merging through SPACs has been in the lame light for all the wrong reasons. We learned recently that these deals were subject to SEC scrutiny in recent months.
In addition to this, we also know that 7GC & Co has also been laying off employees in an effort to restructure its operations. These are not good signs for any company but it would seem Vice sees an opportunity to join forces. Despite the concerns raised over the idea of SPAC mergers, it seems like many media companies see this as a very viable option.
Vice is not the only media firm going through this channel. We have seen many others do the same. We will, however, have to keep an eye on this deal as it could hugely reshape the future of Vice. There’s confidence that a deal could be agreed by the end of the year.