After a long wait, Forbes Media has announced it is heading into a SPAC deal. For the company that has made the name Forbes synonymous with business and financial journalism, the shifting journalism landscape has brought ups and downs over the years.
Forbes is well-known for its lists enumerating the top leaders in specific business categories, including Forbes Billionaires, Forbes Global 500, Forbes 30 Under 30, and Forbes Celebrity 100. But with a Forbes Media SPAC en route, there’s other news.
Rumors of a potential Forbes Media IPO circulated for several months in 2021, and executives at the company did not comment until a deal was official. Although sources stated that Forbes was in talks with Michael Moe’s GSV about a buyout this past spring, in late August the company’s deal with a SPAC to take Forbes Media public was confirmed.
- Forbes Media comprises Forbes magazine and a wide range of business and finance-centered articles in print and online versions.
- B.C. Forbes and Walter Drey founded the company in 1917. Since then, it has undergone multiple ownership changes.
- Integrated Whale Media Investments out of Hong Kong purchased a majority stake in the company in 2014 and currently owns 95% of it.
- Forbes Media had been considering acquisition offers for a sale as well as an IPO option via a blank-check company.
- On August 26, 2021, Magnum Opus Acquisition confirmed the news that it will merge with Forbes Global Media to take it public with an implied pro forma enterprise valuation of $630 million.
A brief history of Forbes
Keeping the history of the Forbes Media company brief is a challenge, since it’s been around since 1917. B.C. Forbes teamed up with Walter Drey to publish the original magazine Forbes: Doers and Doings. Forbes was a Hearst financial writer and Drey managed the Magazine of Wall Street.
As time went on, Forbes’ sons Bruce Charles Forbes and Malcolm Forbes took over the mantle of leadership. Malcolm Forbes joined the business in 1945, followed by his son Steve. Steve Forbes is the current chairman and editor-in-chief and also is known for two unsuccessful presidential campaigns in 1996 and 2000.
Forbes currently publishes ForbesWomen, Forbes Travel Guide, Forbes Asia, and fifteen local editions. The company provides investment advice via Steve Forbes and other writers for the publication on the programs Forbes on Fox and Forbes on Radio.
Via its varied channels of media content and audience engagement, Forbes says that today it reaches beyond 150 million people globally. The company does not rely exclusively on its original magazine for revenue, but instead has shifted its focus to wide-reaching digital platforms, including extensions in real estate, education, and advertiser-funded content.
The company, now in its second century of existence, is only 5% owned by members of the Forbes family, while Chinese investment firm Integrated Whale Media Investments owns the majority stake. Integrated Whale Media took over the majority stake in 2014, valuing Forbes at $415 million.
Forbes has won numerous awards in publishing and leadership, including Digiday Media Awards, American Best in Business, Communicator Awards, and Campaign Publishing Awards. It currently produces 41 global editions, more than 100 ForbesLive events, and its online platforms see over 78 million monthly U.S. visitors.
Forbes Media fundraising
Since 2014, Forbes Media has been primarily owned by Integrated Whale Media Investments, which continues to hold a 95% stake in the company. Steve Forbes and Timothy Forbes, who were third-generation owners of the family company, engaged in legal struggles for several years over the loan it provided to Integrated Whale, finally settling in 2017.
The New York Post reported that the deal with Integrated Whale was for $415 million, divided up into $350 million in cash and a $65 million loan from the Forbes family. With the $350 million the Forbes family received, they bought out minority partner Elevation Partners (formerly led by Bono of U2).
The path to a Forbes Media SPAC
Forbes Media has been discussing next steps over the past year, but didn’t confirm IPO rumors until late August 2021.
In May of this year, the company was said to be in talks with a group led by Michael Moe’s GSV Asset Management. At the time, they discussed a $650 million deal. However, an IPO was also said to be on the table.
Magnum Opus Holdings, LLC launched Magnum Opus Acquisition Limited. The blank-check company went public on the New York Stock Exchange on March 25, 2021 under symbol OPA.U. It raised $200 million in the offering. Both Magnum Opus and Forbes confirmed the impending merger on August 26.
The terms of the Forbes IPO include a $400 million PIPE (private investment in public equity). The newly combined company is expected to have an implied pro forma enterprise value of $630 million. There will also be about $600 million in gross proceeds on the IPO transaction.
If no public shareholders of Magnum Opus make redemptions, the result will be that Forbes shareholders own 22% of the merged company, with $145 million available in cash.
After all the speculation, potential investors know more concrete details about the Forbes IPO. The date has not been set, but the SPAC deal will likely close in late Q4 of 2021 or early Q1 of 2022. The new stock ticker symbol will be FRBS once the merger is completed.
A new board will be announced at the time of the merger, and at this point all existing executive leadership is expected to remain unchanged.
Risks and opportunities in the Forbes Media IPO
CEO of Forbes Media, Mike Federle, stated upon announcing the merger, “With this transition into a publicly traded company, Forbes will have the capital to accelerate growth by executing its differentiated content and platform strategy and fully realize the potential of our iconic brand.”
The company has adapted to the changing world of media from print magazines and newspapers to the current digital takeover. After more than 104 years in business, its diverse suite of products now including “conferences, real estate, education, and financial services” may continue to grow after it goes public.
The IPO is taking place through the vehicle of a special purpose acquisition company, which may put some investors on pause. SPACs have cooled recently, in part due to increased regulations. Some SPAC deals have lost investors big money, like Bill Ackman’s recent failed SPAC merger with Universal Music Group.
Still, the SPAC route to going public may be a good option for Forbes. Digital media competitor BuzzFeed also announced its plans for a SPAC IPO earlier this summer, and Vox is reportedly considering offers from blank-check companies as well.
Forbes Media isn’t the first publisher in 2021 to pursue the public route. Many publicly traded publishers are exclusively digital, while Forbes magazine has both its print versions and multiple digital platforms. As media companies continue to adapt to an increasingly digital world, they have found means of monetizing to make up for the decline in popularity of printed content. Stay tuned for what the next chapter of this longstanding media firm will look like, SPAC and all.