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Vice Media buys Refinery29 – Axios



Vice Media LLC has acquired Refinery29, the venture-backed digital media company focused on millennial women. Terms of agreement were not disclosed.

Why it matters: It is the latest media mega-merger between two companies supporting venture companies that want to consolidate to survive.

Details: The agreement was signed Tuesday in New York by Vice Media CEO Nancy Dubuc and Refinery29 co-CEO Justin Stefano and Philippe von Borries.

  • Money: CNN reported Monday that there were rumors that the deal was under $ 500 million. Refinery29 has raised over $ 120 million to date. Executives said in May that the company raised more than $ 100 million in revenue last year.
  • Strategy: According to a Vice spokesman, the hope is that the acquisition will bring the company one step closer to profitability. Refinery29 will remain a clear brand in the Vice Media Group portfolio, the companies said in a statement.
  • Finance: Guggenheim Securities, LLC served as financial advisor and Shearman & Sterling LLP as legal advisor to Vice. Allen & Company LLC and The Raine Group acted as financial advisors and Gunderson Dettmer as legal advisor to Refinery29.

What it says to Vice: The agreement will help the company reach more female millennials and bring in more female employees. It will also strengthen Vise's e-commerce, events and studio businesses, both of which are central to Refinery29.

  • "Vice Media's former employee base had an equal gender distribution. Now, with the addition of Refinery29, Vice Media Group will have a workforce that is majority women," the company said in a release.

What is it for Refinery29: Vice will help Refinery29 scale internationally, which has been a growth target for a long time. Vice says its global footprint accounts for 50% of sales.

Back story: In November, Disney wrote down $ 157 million of its initial $ 400 million investment in Vice 3 years ago, shortly after reports suggested the company expected to lose $ 50 million as revenues fell flat. [19659009] Vice had scrapped a plan for a stock exchange listing from 2018. Reports emerged that year of sexual harassment issues, which also led to the ousting of CEO and co-founder Shane Smith.

  • In May, Axios reported that Refinery29 was seeking to raise another $ 20 million and had already secured around $ 8 million from its first investors.
  • The new investment, which would be in the form of convertible debt, would bring the total amount the company has raised to $ 145.4 million since 2010.
  • Rumors have been circulating for months that Refinery29 was in talks to sell .
  • 19659008] Be smart: Both companies have faced layoffs and product consolidation in recent years as the advertising landscape has changed for media companies.

    • Vice Media laid off 10% of the workforce in February. About 250 jobs were cut at all department and job levels.
    • Refinery29 confirmed in October last year that it would lay off 40 employees – about 10% of staff. In December 2017, it laid off 34 employees.

    What's next: The purpose of the merger is to bring synergies to both companies that will enable them to grow faster and scale their digital business.

    • Vice says revenue growth was the best in the company's history for the first half of this year, up more than 14% from the year before in the second quarter alone. It attributes the success of the branded content and licensing studios.
    • Refinery29 has also experienced growth in the licensing business. In May, Axios reported that the company's fundraising efforts would be used to expand the original studio and event business, as well as to grow internationally.

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