Group Nine acquired PopSugar on the heels of raising $50 million from lead investor Discovery Inc. and partner Axel Springer SE.
WHO: Women’s lifestyle publisher PopSugar was founded by husband-and-wife team Brian and Lisa Sugar in 2006 as a blog that has since evolved into a shopping platform, a cosmetics line, and a festival business.
Group Nine is the digital media group formed by the merger of Thrillist, NowThis, The Dodo and Seeker.
WHY: The combined organizations will reach an audience of more than 200 million social media followers, and PopSugar’s commerce offerings, including its quarterly subscription Must Have Box and its Glow marketplace for fitness content and merchandise, are a good fit for Group Nine’s broader ambitions in the market.
IN THEIR OWN WORDS: In a statement, Group Nine CEO Ben Lerer (pictured above) said, “When we started Group Nine almost three years ago by combining Thrillist, NowThis, The Dodo, and Seeker, we foresaw the impending consolidation of the industry and set out to create a model for the next-generation media company with significant scale, deeply loyal and engaged audiences, multiplatform expertise, and highly diversified revenue. PopSugar hugely expands our reach within an important demographic, bringing us a community that deeply loves the PopSugar brand and a company with the proven ability to diversify their revenue across premium advertising, affiliate, direct-to-consumer commerce, licensing, and experiential channels.”
“Over the last few years, we’ve gotten PopSugar to profitability and found a way to build a well-diversified business that has outlasted many of our competitors in a rapidly evolving space,” Brian Sugar said to WWD. “Joining forces with a company and team that has the ambition, momentum and market leadership of Group Nine, combined with our experience and innovation in commerce and experiential, will allow us to build a scalable business model that sets the standard for the next-generation media company.”
- Financial terms were not disclosed but, according to The Wall Street Journal, the all-stock deal values PopSugar at more than $300 million and will give its shareholders more than 30% ownership of the combined company. That estimate represents a drop from Rakuten’s reported $580 million offer in 2015, but is closer to PopSugar’s $365.85 million valuation in 2011.
- Group Nine has raised $190 million to date and was valued at more than $600 million in the deal.
- PopSugar will be Group Nine’s fifth stand-alone brand in the portfolio, and will maintain full editorial control.
- PopSugar expects to have about $100 million in revenue in 2018.
- The company has raised about $46 million from investors including Sequoia Capital, NBC Universal, and IVP.
- To date Group Nine has raised $190 million, including a $50 million investment led by Discovery in September, valuing the business at more than $600 million.
- PopSugar’s employees number around 500; many of the executives are set to be integrated into the Group Nine organization.
- Lerer will remain CEO of Group Nine, while PopSugar co-founders Brian Sugar and Lisa Sugar will join Group Nine’s executive team. Brian Sugar and strategic investor Michael Moritz will sit on Group Nine’s board of directors.
Photo: via PopSugar