NEW YORK - BuzzFeed, Inc. (NASDAQ:BZFD) has completed the sale of Complex Networks to digital platform NTWRK in a transaction valued at $108.6 million in cash. The deal, which includes an additional $5.7 million for the use of BuzzFeed's New York offices and related severance costs, marks a strategic shift for the media company as it aims to streamline operations and focus on its core brands.
As part of its strategic restructuring, BuzzFeed plans to reduce its workforce by 16%, resulting in an estimated $23 million in annual cost savings. The restructuring is set to take place on Wednesday, February 28, 2024, and is designed to reduce centralized costs, allowing the company to become more agile and profitable.
The cash proceeds from the Complex sale are earmarked for several financial moves to strengthen BuzzFeed's balance sheet and improve liquidity. These include redeeming $30.9 million of the company's convertible notes due in 2026, repaying in full a $35.5 million revolving credit facility, financing the upcoming strategic restructuring, and optimizing working capital.
BuzzFeed Inc.'s CEO, Jonah Peretti, highlighted the sale as an opportunity to bolster the profitability of BuzzFeed and its other brands, including HuffPost, First We Feast, and Tasty. He also noted the potential for Complex to grow within NTWRK's commerce-driven business.
The divestiture follows a reassessment of fourth-quarter financial expectations. BuzzFeed now projects fourth-quarter revenues on a continuing operations basis to be between $73 million and $78 million, with adjusted EBITDA in the range of $15 million to $20 million. These figures have been adjusted to exclude contributions from Complex, which was held for sale during the period.
BuzzFeed acquired Complex Networks in December 2021 for a combined $198 million in cash and equity. The sale to NTWRK does not include First We Feast and its popular show Hot Ones, which will remain under BuzzFeed's umbrella.
The company plans to release its full-year 2023 financial results on March 25, 2024, after market close, followed by a conference call hosted by Peretti and CFO Matt Omer.
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