Vice Media, a US-based media group backed by corporates 21st Century Fox, A&E Networks, Walt Disney and WPP, is looking to raise up to $200m in financing, The Information reported yesterday.
The company may choose to raise the money in a mix of equity and debt financing, but the round could fetch a “steep discount” on its last valuation of $5.7bn, which it achieved in 2017, due to it booking losses.
Founded in 1994 as a local zine focused on the Canadian city of Montreal, Vice has grown into a media and broadcasting group that incorporates books, a monthly magazine, a digital media offering, a dedicated newsroom, a film production studio, a record label and a television channel known as Viceland, all targeting a millennial demographic.
The proposed funding is expected to help Vice reach profitability by early 2020. It laid off 250 people across all departments last week, representing some 10% of its workforce, as part of a restructuring effort to reduce its focus on its online properties.
The company has struggled to grow revenue while Viceland has failed to attract high ratings, and a weekly documentary series it produced for cable network HBO was cancelled.
The Wall Street Journal reported in November 2018 that Vice’s annual revenues were flat year on year at between $600m and $650m, more than $100m below projections it provided to private equity firm TPG Growth when the latter supplied $450m in funding in 2017.
TPG’s commitment had increased Vice Media’s total funding to more than $1.35bn. Marketing firm WPP first provided an undisclosed sum in 2011, before entertainment group 21st Century Fox injected $70m two years later at a $1.4bn valuation.
A&E Networks subsequently paid $250m for a 10% stake in 2014, before growth equity firm Technology Crossover Ventures had invested more than $250m weeks later.
Walt Disney provided $400m in funding for Vice over two tranches in November and December 2015, but has written down its stake by about 39%, according to a quarterly filing made in November 2018. It owns a 21% stake in Vice according to company filings.
