BuzzFeed is selling Complex to NTWRK for $108.6 million in cash plus $5.7 million for use of NYC office space, severance and other employee costs. It also announced a strategic restructuring including laying off 16% of its workforce that it expects will save $23 million a year.
The company will discuss details on Feb. 28
The company sold itself in a SPAC deal in 2021 and went public. It shut its news division last year amid challenging economics. The company said the sale of Complex is expected to enhance its profitability and allow for greater focus on BuzzFeed, HuffPost, First We Feast and Tasty.
Cash proceeds will be used to: Redeem a portion ($30.9 million) of the company’s convertible notes due 2026; eliminate its revolving credit facility by repaying it in full ($35.5 million — amount outstanding plus accrued interest and fees); finance its strategic restructuring; and optimize working capital.
“The sale of Complex represents an important strategic step for BuzzFeed Inc. as we adapt our business to be more profitable, more nimble, and more innovative.” said CEO Jonah Peretti. “This is also an opportunity to unlock greater value for the Complex brand by combining it with NTWRK’s expansive, commerce-driven business.”
He said the “changes announced today will enable an exciting next stage for our company, with increased focus on our iconic brands…I look forward to sharing more in the coming months.”
Buzzfeed also also revised financial guidance lower for the fourth quarter of 2024 ahead of the numbers to be issued in March 25. Revenues from continuing operations of $73 million-$78 million is down from an outlook of $99-$110 million, and adjusted EBITDA from continuing operations is in the range of $15 million-$20 million vs its previous forecast of $20 million to $30 million.
“During the fourth quarter our experiential business was impacted in the form of lower sponsorship revenues for the brand’s annual flagship event, ComplexCon, we believe as a result of the Complex asset being held for sale,” BuzzFeed CFO Matt Omer.
“Further, our overall revenue performance reflects the challenges of delivering against our bundled go-to-market strategy in a tighter digital advertising market. As a result, we have made the decision to reduce the size of our centralized operations enabling our individual brands to operate with more autonomy and deliver against their differentiated value propositions for advertisers.”
