“The time is really right, right now, for what is a bold move to go into the public market,” Federle said.

The key details:

• The transaction is expected to raise about $600 million, with a $200 million cash contribution from Magnum Opus (which it raised from its March IPO) and $400 million raised through a private investment in a public entity transaction (called a “PIPE”) of the combined company, at $10 per share from investors (meaning existing owners can benefit from any share price increase on their remaining stakes).
• The transaction is expected to close in late fourth quarter 2021 or early first quarter 2022. Forbes shareholders are expected to own about 22% of the combined company at closing.
• The investment will be used to build out the company’s tech, investing, consulting and luxury goods offerings, as well as to fuel joint venture and licensing deals, Federle said.
• Forbes generated $180 million in revenue in 2020, a 15% decline year over year.
• Forbes’s audience spans more than 150 million worldwide, and the publisher currently has 23,000 paid subscribers. Its website had 51 million unique visitors in July 2021, according to Comscore.
• Unlike some of the other digital-native publishers that have announced plans to go public in the past year, Forbes is a legacy brand that still owns a print magazine.
• Since 2014, Hong Kong-based investor group Integrated Whale Media Investments has owned 95% of Forbes; the rest of the company is owned by the Forbes family.
• Forbes’ existing management team will continue to oversee operations, under Federle, who will be on Forbes’ new board.

The business breakdown

Forbes’ business breaks down into three revenue streams: media (ex. advertising), consumer (ex. subscriptions) and brand extensions (ex. conferences and brand licensing deals).

This year, Forbes is projected to generate $138 million in media revenue (up 5% year over year), $47 million in brand extensions revenue (up 19% year over year) and $16 million in consumer revenue (up 75% year over year), according to its investor presentation. The company expects its consumer revenue growth to decelerate in 2021 and 2022, while its media and brand extensions revenue growth is expected to pick up or hold steady.

Per the investor presentation, Forbes currently has 23,000 subscribers and aims to eventually attract more than 1 million subscribers, though the company did not provide a specific timeframe for that goal. Another long-term goal is to reach more than …read more

Source:: Digiday

Author: Aaron