Vice Media to Go Public Via SPAC

Deal Would Value Vice at $3 Billion

Vice Media Group is gearing up to go public through a $3 billion SPAC transaction. SPAC stands for Special Purpose Acquisition Corporation.

Under the proposed deal by the SPAC, 7GC & Co. (VII), existing investors TPG, Disney (DIS), A&E Networks, Vice founder Shane Smith, and Raine Group, would own 75% of the public company. The remaining 25% would go to new investors. Vice’s existing investors will exchange their shares for stock in the public iteration of Vice.

The transaction is seen as a way to get rid of Vice’s obligations to TPG, the private equity firm. TPG owns preferred stock in Vice which enables it to receive additional equity if the media company does not meet certain milestones.

Vice’s Valuation Has Dropped

The $3 billion valuation Vice will receive if a deal transpires is lower than the company’s $5.7 billion valuation in 2017 when TPG invested $450 million into the company.

7GC & Co plans to pitch the deal to investors by positioning Vice Media as an alternative to other new media companies because it is diversified in several areas including film and TV production. It is also still in growth mode. Vice’s revenue hit $600 million in 2020, and it is targeting revenue of $680 million in 2021 and $1 billion by the end of 2023. However, there is no guarantee that 7GC & Co will complete the deal or that there will be sufficient interest from investors.

Other Digital Media Companies Seek Capital to Expand

Vice Media is among a handful of digital media companies evaluating SPAC or merger deals. The digital advertising market is beginning to rebound, but many companies need more capital to scale. BuzzFeed is reportedly in talks to go public via a SPAC while The Athletic, a news website focused on sports, is in talks about a deal with the New York Times (NYT).

Investors may be cautious about this transaction because Vice has failed to deliver on some of its previous forecasts. In 2015, Vice’s founder predicted that the company would hit $1 billion in revenue, a goal which the company has not yet achieved. Investors and leaders across the digital media landscape will be eager to see how Vice’s plans unfold.

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