Momentum is building toward consolidation in the digital media sector as big and small players alike look for potential combinations.
BuzzFeed Inc. and NowThis owner Group Nine Media Inc., two of the largest venture-backed outfits, are exploring deals to buy competitors or go public through special-purpose acquisition companies, or SPACs, according to people familiar with the matter. Those blank-check companies raise capital by going public and can put the proceeds into deals.
Among relatively smaller players, short-form publisher Axios is exploring potential acquisitions, while local news network Patch is weighing a sale after receiving inbound acquisition interest, the people said.
Other potential targets are beginning to emerge, including the youth-culture media company Complex Networks and news curation startup theSkimm. Neither company is currently in talks to sell, some of the people said.
Several factors have created fertile conditions for dealmaking. Major tech players including Alphabet Inc.’s Google and Facebook Inc. have cornered the digital advertising market, pressuring publishers to find other ways to grow.