Forbes is going public via $630 million SPAC merger with Magnum Opus Acquisition
Forbes Global Media is going public through a blank check merger with Magnum Opus Acquisition in a deal that will value the combined entity at $630 million, according to an announcement on Thursday.
The business news organization, which publishes Forbes magazine, is expected to raise approximately $600 million of gross proceeds, which comprises around $200 million of cash held in Magnum Opus’ trust account and roughly $400 million private investment in public equity, or PIPE, the announcement said.
The transaction, which is expected to close in the fourth quarter of 2021 or the first quarter of 2022, will be used to further the digital transformation push at the company.
Forbes said it will also use its fund to “convert readers into long-term, engaged users of the platform, including through memberships and recurring subscriptions to premium content and highly targeted product offerings.”
The management team at Forbes will remain in place after the deal under the leadership of CEO Mike Federle, the announcement said.
Forbes is best known for curating lists of wealthy business icons and influential leaders around the world. The brand reaches more than 150 million people and covers 76 countries.
Magnum Opus Acquisition is a blank-check firm led by CEO Jonathan Lin. It is sponsored by L2 Capital, a private investment firm.
Forbes is just the latest media organization to go public. In June, Buzzfeed agreed to go public, also via SPAC acquisition.
SPACs, shell companies that list with the aim of merging with private companies and taking them public, have exploded in popularity in the past few years.
This method is typically done in lieu of an IPO or a direct listing and has garnered support from Wall Street heavyweights as well as pop icons and professional athletes.
But the frenzy is also drawing the attention of regulators , who are looking into tightening the rules, particularly around projections of future earnings potential and conflicts of interest among deal makers.
In 2020, a total of 248 SPACs raised $83.3 billion according to SPAC Analytics . Over halfway through 2021 alone, data already show 414 SPACs that have raised $121 billion, comprising 44% of initial public offerings.
The past few months however have seen a slight cooling off in the market, as first-day trading spikes that were common in the space earlier this year evaporate.