Byron Allen will buy a controlling stake in BuzzFeed and take over as chairman and CEO, while founder Jonah Peretti steps down as CEO and becomes president of BuzzFeed AI. [1, 2, 3, 4]
BuzzFeed said the deal values the company at $120 million, or $3 a share for 40 million shares. Allen Family Digital is expected to end up with 52% of BuzzFeed's outstanding shares after the transaction. [1, 2, 3]
The purchase will be financed with $20 million in cash and a $100 million promissory note due in five years with 5% annual interest. Peretti said the deal "will provide liquidity and operational focus to BuzzFeed, Inc." [1, 2, 3]
BuzzFeed said it is making significant changes, including cost cuts, before the ownership change. The company reported a nearly 20% drop in first-quarter advertising sales and a net loss of $15.1 million. Allen's media holdings include The Weather Channel and local TV and broadcast stations. [1, 2, 3]
One report said BuzzFeed is separating Tasty and BuzzFeed Studios into new independent entities, while another said BuzzFeed Gaming has quietly shut down and the company will shift more toward free streaming video, user-generated content, audio and AI applications. [3, 4]
The transaction is expected to close at the end of the month. The $100 million note is due in five years. [1, 2, 3]
