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Should investors care about Forbes’ SPAC listing?

Forbes Media is reportedly considering listing via a SPAC. The media company is in discussions to go public via a merger with blank cheque company Magnum Opus Acquisition [OPA], people familiar with the matter told Bloomberg. The Hong Kong SPAC, which is sponsored by L2 Capital, has valued Forbes at $650m.

A Forbes SPAC IPO fits in with the investment vehicle’s search for a target “with disruptive growth potential through the use of technology that can benefit from operations in Asia”.  A Forbes listing has been on the cards, with the media company previously having been in talks with GSV Asset Management that had valued the company at $600m.

Since reports began surfacing on 17 August that it was in talks with Forbes about a listing, Magnum Opus Acquisition’s stock has gained more than 1% as of 24 August close.

$650million

Valuation of Forbes by Magnum Opus Acquisition

  

Why should investors care about a Forbes listing?

Widely known for tracking the movements of the US business elite, the media publication has increased its coverage of the Asian business scene. The publication has its own dedicated print edition for covering Asia’s wealthy business leaders, Forbes Asia, and launched its inaugural 100 To Watch List in the region this year. As the tech sector continues to grow in Asia, this could lead to increased interest in coverage of its business leaders, resulting in more traffic for Forbes and ultimately more advertising revenue. 

South-east Asia’s burgeoning tech scene rode out 2020 with $8.2bn in funding, according to Bloomberg, on a par with 2019 levels despite the pandemic being at its peak and outperforming other emerging markets. UBS’ Billionaires Insights Report 2020 found that the Asia-Pacific region has more billionaires than any other region. The region also had the highest share of tech and healthcare billionaires, accounting for 18% of the total billionaire population.

 

What to know ahead of a Forbes SPAC?

Forbes was founded in 1917 by BC Forbes. Forbes Magazine champions entrepreneurs and free markets. The publisher is perhaps best known for its popular lists that rank billionaires, colleges, and people to watch in a given age bracket. According to the Owler, Forbes has an annual revenue of $400m.

The company’s CEO, Mike Federle, took the helm in 2017, saying he would drive Forbes’ global expansion to realise the “enormous potential of the Forbes brand and business”.   Before Federle, Mike Perlis had served as CEO, having joined Forbes in 2010 with a remit to increase the magazine’s digital media business, including allowing advertisers to upload content on the magazine’s website – known in the trade as advertorials.

$400million

Forbes' annual revenue

  

According to Forbes’ website, Forbes.com has 132 million monthly global visitors and 78 million US monthly visitors, while the print magazine reaches 6 million readers.  Advertisers can market to Forbes readers through its print, online and social channels, along with event sponsorship. Among its portfolio of publications is Investopedia, the popular financial education website.

In 2014 Hong-Kong based Integrated Whale Media [IWM] effectively took over Forbes, taking a 95% stake in a deal worth $415m.

 

A Forbes listing joins other media companies going public

Forbes’ SPAC IPO isn’t unique among online med. BuzzFeed inked a deal back in June with 890 Fifth Avenue Partners, which valued the publisher at $1.5bn. The deal could provide BuzzFeed with capital to acquire other digital media outlets, with plans to pick up Complex Networks for $300m, according to an investor presentation.

In 2020, BuzzFeed generated $321m in revenue largely thanks to its e-commerce business and has estimated $654m in revenue in 2022, according to an investor presentation.

$321million

BuzzFeed's annual revenue in 2020

  

In the presentation, BuzzFeed highlights both its suite of iconic brands, which includes the Huffington Post, and its platform that allows for “rapid scale and monetisation with a deep understanding of virality and social”. BuzzFeed highlights ad budgets moving away from platforms such as Facebook [FB] and Twitter [TWTR] to options that focus on “diversity and brand safety”.

Vox Media, the owner of New York Magazine and Eater, is reportedly courting several offers from SPACs, while Vice Media is looking to go public after a planned merger with 7GC & Co stalled.

These companies are using SPACs to raise capital for acquisitions or to expand advertising growth, although Forbes hasn’t been as active in the M&A space

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