Commentary

What Will Ziff Davis Buy With A $1 Billion War Chest?

Ziff Davis next month will return as a public company with $1 billion to acquire media properties as the digital advertising market continues its recovery. The storied publishing brand will become more prominent as the new name for J2 Global, the conglomerate that is splitting itself into two companies.

Ziff Davis will own J2’s media assets, including Mashable, PCMag and IGN, while its eFax business will be spun off into another company named Consensus. Ziff Davis will trade on the Nasdaq with the symbol ZD, according to an announcement.  

Vivek Shah, the current CEO of J2, will lead the renewed Ziff Davis. A former Time Inc. executive, Shah in 2010 led a private-equity purchase of Ziff Davis for less than $25 million. He participated in its sale to J2 for $167 million two years later, and became CEO of the parent company in 2018.
Ziff Davis’s war chest for deal making will include $350 million, $400 million from debt financing and another $250 million in borrowing after the spinoff of Consensus, The Wall Street Journal reported, citing a person familiar with the matter.
J2 has been an opportunistic buyer of digital media properties, having racked up $2.5 billion in deals since 2013. It bought coupon company RetailMeNot for about $420 million from analytics company Vericast, the biggest of its $480 million in acquisitions last year. J2’s current market value is $6.25 billion, with a stock that has risen by about 80% in the past 12 months.
Shah provided the WSJwith some clues about his plans for acquisitions, saying Ziff Davis will look for opportunities in the consumer finance, travel and automotive categories. Advertisers in the pharmaceuticals, telecommunications and videogames industries have provided reliable growth in seeking to reach target audiences.

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With media buyers demand to see measurable business outcomes from advertising, Ziff Davis’s focus on performance marketing can be a strong source of growth.

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