The publisher of Forbes magazine will go public through a merger with a blank-cheque firm in a deal that values the combined entity at US$630-million, the companies said on Thursday, as part of a broader consolidation of the media industry in recent months.
Forbes, one of the oldest media outlets in the United States, will merge with Magnum Opus Acquisition Ltd., a special-purpose acquisition company (SPAC) led by Jonathan Lin, a former executive at billionaire Steven Cohen’s Point72.
The deal will allow Forbes to further capitalize on its digital transformation, Forbes Global Media Holdings said.
With print revenue sliding, the business news outlet has been doubling down on its live events and other key franchises, most of which have turned virtual during the pandemic.
Jersey City, N.J.-based Forbes was founded in 1917 by B.C. Forbes, a business journalist and columnist born in Scotland who later moved to Johannesburg and worked under a South African newspaper headed by British writer Edgar Wallace.
Forbes’s son Malcolm joined the magazine in 1945. After him, the magazine was led by his son Steve Forbes, currently chairman and editor-in-chief, who made failed runs for U.S. president in 1996 and 2000 in the Republican primary.
The Forbes company was valued at US$475-million when Hong Kong-based investor 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 tech investor Michael Moe, which would have allowed it to stay private, Reuters reported in April.
With its SPAC deal, Forbes joins other media outlets including BuzzFeed which agreed to a blank-cheque merger in June, and Vox Media, which is also reportedly pursuing such a merger.
In a sign of further activity in the sector, German publisher Axel Springer said on Thursday it will acquire U.S. political news website Politico.
The Forbes deal is expected to fetch US$600-million of proceeds and includes a private investment in public equity (PIPE) of US$400-million.
The unusually-large PIPE comes at a time when the broader SPAC market has been weighed down by heightened regulatory pressure and saturated demand, with companies struggling to attract the interest of leading Wall Street institutional investors.
Some blank-cheque deals, including the proposed merger between Bill Ackman’s SPAC and Universal Music Group, have also recently collapsed.
Forbes shareholders will own nearly 22 per cent of the combined company, assuming no redemptions by Magnum’s investors, and the company will be left with US$145-million in cash.
SPACs raise funds in an IPO with the aim of merging with a private company, which then becomes public. Magnum raised US$200-million in a March IPO.
After the deal closes, Forbes will list on the New York Stock Exchange under the ticker symbol “FRBS.”
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