Vox Media, Group Nine Media in Advanced Talks to Merge

Mr. Bankoff confirmed the deal talks in a memo to employees on Monday after The Wall Street Journal first reported on them.

Vox Media, owner of media properties including tech-focused website the Verge, current-events site Vox.com and sports-focused SB Nation, has been expanding. In August, it agreed to acquire cocktail website Punch to deepen its coverage of food and drinks. Vox has explored ways to raise cash for further growth, including the possibility of going public, people familiar with the matter have said.

Group Nine Media, whose brands include news outlet NowThis, lifestyle site Thrillist and animal-focused the Dodo, has also been an active consolidator in the media space. It earlier explored a deal with BuzzFeed and in 2019 purchased female-skewing digital-media company PopSugar.

Group Nine last year formed a special-purpose acquisition company to explore potential acquisitions. A deal with Vox Media wouldn’t involve the SPAC, the people familiar with the situation said.

The combined company is expected to generate more than $700 million in revenue in 2022 and more than $100 million in profit, according to people familiar with the matter, making it one of the biggest players in the space. On a pro forma basis, the combined company grew revenue by about 30% this year compared with last year, the people said.

“The business rationale behind this merger is to grow revenue, increase scale, and combine these incredibly powerful and complementary portfolios,” Mr. Bankoff said in his note to employees. “Together we will be an even stronger, more financially sustainable company that can invest more in our products and our people.”

Mr. Bankoff said he expected the deal to be signed soon. He said Group Nine Media Chief Executive Ben Lerer would be a director on the combined firm’s board.

Digital media executives say the industry is primed for consolidation. Many players believe they need more scale to compete effectively for online ad dollars and expand further in areas such as e-commerce, events and podcasting. BuzzFeed Inc., which recently began trading as a public company after a deal with a SPAC, has signaled its interest in doing deals. Bustle Digital Group also has explored deals with a SPAC.

After a merger of Vox Media and Group Nine, the combined firm could be in position to pursue additional deals, people close to the transaction said. One of the people said an IPO could be possible eventually.

Group Nine Media and Vox Media earlier held preliminary talks after Group Nine announced its SPAC, but those talks cooled, according to people familiar with the matter. The two companies resumed discussions in the summer and have been working toward a deal since then, the people said.

In addition to his duties on Vox Media’s board, Mr. Lerer is expected to continue working at venture firm Lerer Hippeau as a managing partner, one of the people said.

Write to Amol Sharma at [email protected] and Benjamin Mullin at [email protected]