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Forbes jumps into hot media liquidity summer with a SPAC combo
What a busy week in the world of media liquidity.
That’s a sentence you don’t get to write often. Regardless, news broke this week that Axel Springer is buying U.S. political journalism outfit POLITICO. The transaction was expected, but the eye-popping roughly $1 billion price tag still has tongues wagging. We even got on the podcast to chat about it.
And Forbes announced that it is going public via a SPAC. The business publication’s news follows BuzzFeed’s journey to the public markets through a blank-check company. Hot media liquidity summer? Something like that.
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That TechCrunch is in the process of being sold to private equity, of course, is not something that we should forget. Shoutout to the Verizon bankers who found a way to get rid of us while also deleveraging Verizon’s debt profile. Ten points.
I want to take a quick tour of the Forbes SPAC deck this morning. Our notes on BuzzFeed’s are here, in case you want to run comparisons. This will be easy and fun. Perfect Friday morning fare. Into the data!
What’s it worth?
In corporate-speak, Forbes Global Media Holdings is merging with blank-check company Magnum Opus Acquisition Limited. The transaction will close either Q4 2021 or Q1 2022, Forbes estimates.
The deal itself is somewhat modest in scale compared with other SPAC deals we’ve recently looked into. Forbes reports that it will sport “an implied pro forma enterprise value of $630 million, net of tax benefits,” after its completion. Some $600 million in gross proceeds will be derived from Magnum Opus funds “and $400 million of additional capital through a private placement of ordinary shares of the combined company,” Forbes writes.
The company will sport an equity valuation of $830 million after the deal closes, per its own calculations. That number will change some depending on redemptions ahead of the combination. The gap between the large dollars going into the deal and the modest final valuation of the public Forbes entity is due to some $440 million in secondary transactions for existing Forbes shareholders.
In case you’d prefer all of that in table form, here’s the Forbes investor deck:
Image Credits: Forbes SPAC deck
Is $830 million a fair price? Let’s dig into Forbes’ results.
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Report: Apple’s news and magazine subscription service to launch in early 2019
Bloomberg today updated its earlier reporting on Apple’s plans for a news and magazine subscription service. Earlier this year, the outlet said Apple would relaunch the digital newsstand business Texture, which it acquired this spring, as part of the Apple News app. Now, Bloomberg confirms the launch time frame could be “as soon as this spring.” It also detailed some of the industry reaction, which is cautious at best.
Apple is said to be courting paywalled newspapers like The Wall Street Journal and The New York Times to join Texture, and is working on a new design for the magazine content. Instead of trying to mimic what a magazine looks like in print, as it does today, Apple is making the content look more like typical online news articles, Bloomberg said.
The report also noted publishers were proceeding with trepidation, in many cases. Because Apple is offering a lower pricing — $9.99 per month for all-you-can-eat news and magazine content, similar to the Netflix model — publishers are worried Apple’s service will eat into their revenues. This $10 price point, after all, is cheaper than a subscription to a single publication — like The NYT’s digital subscription — in some cases
Instead, publishers prefer a platform that lets them build their own paywalls right into Apple’s app.
But Apple’s counterpoint during negotiations has been that the subscriber growth it could bring would make up for the lost revenues from publishers’ own subscription businesses, the report also said. The company compared its potential to that of Apple Music, which is nearing 60 million users, according to the latest from Billboard.
Texture today offers access to more than 200 magazines, including Vanity Fair, EW, GQ, Vogue, Forbes, Time, People, Rolling Stone, Cosmopolitan, Sports Illustrated and many others, including Bloomberg Businessweek.
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Magzter Launches Magzter Gold, Offering Unlimited Access To 2,000+ Magazines For $9.99 A Month
Startup Magzter is already selling many magazines on the web and mobile devices, but it’s been focused on traditional purchase models — buying single issues, or annual subscriptions to individual titles. Now, with the launch of a new service called Magzter Gold, the company is embracing the all-you-can-read (or watch, or listen to) subscription model popularized by Netflix and… Read More
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