Group Nine, the media organization that specializes in digital video, will acquire PopSugar, the digital lifestyle brand, the company announced today. It’s unclear whether there will be layoffs as a result of the merger.
Group Nine already includes brands NowThis (news), The Dodo (animals), Thrillist (food and travel) and Seeker (tech). PopSugar will be its fifth stand-alone brand, with full editorial control, after the deal closes, which is expected within 40 days. Financial terms of the all-stock deal were not disclosed, but The Wall Street Journal, which broke the story, valued PopSugar at more than $300 million.
The combined company, which will fit under the Group Nine portfolio, will reach more than 50% of the U.S. population and 70% of millennials, Group Nine said. “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,” said Ben Lerer, CEO of Group Nine, in a statement.
The end of last year saw layoffs from Slate, Vox Media, NY Daily News, Good Media Group, The Outline, BuzzFeed, Panoply and Refinery29, and already this year has seen layoffs at Verizon Media (formerly Oath), Gannet, BuzzFeed, HuffPost and Sports Illustrated, to name a few. That period of time was a “natural, necessary (and, albeit painful for some) shake out of the industry,” Lerer wrote in a memo to staff today.
“Consolidation is now in full swing and it’s pretty clear there’s a small handful of digital media holding companies that will become profitable and enduring; and with this deal, we further cement our position as one of the few leaders in this group,” he said in the memo.
There have been a number of acquisitions in the media in recent days. Explainer site Dotdash announced last week that it had made its fourth acquisition this year in Liquor.com, and Vice Media said it would merge with Refinery29. Last week, Vox Media and New York Media (and all of its sister brands) announced their intention to merge, and in July, Bustle Digital Group acquired tech and science site Inverse.
In the memo, Lerer referred to PopSugar as “profitable” and Group Nine as “incredibly well positioned” after a $50 million fundraising round from lead investor Discovery Inc. and partner Axel Springer SE.
Lerer said the company would “look at cost efficiencies when it comes to infrastructure” but that the lack of overlap between the two entities was “remarkable.”
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.
“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,” Brian Sugar said in a statement.