Vice Media to Acquire Refinery29, as Both Digital-Media Players Seek Scale

Vice - Nancy Dubuc Refinery29 Justin
Jeff Katz Photography (Dubuc); Courtesy of Refinery29

After months of talks, Vice Media sealed an agreement to acquire Refinery29, a bet by the two digital-centric media companies they can create a stronger union together to reach youth-skewing audiences.

The value of the pact, expected to close before the end of 2019, isn’t being disclosed. In the transaction, Vice is issuing mostly stock to Refinery29’s shareholders with a smaller cash component, according to a source familiar with the deal. Vice’s acquisition values Refinery29 at $400 million, per a New York Times report. The deal values the combined entity at $4 billion, the Financial Times reported — well under the $5.7 billion valuation Vice Media boasted a little over two years ago.

Brooklyn-based Vice has around 2,500 employees. Refinery29, headquartered in lower Manhattan, has under 400. Both companies in the past year have cut about 10% of their staffs, as they have faced the same challenges in hitting revenue and profitability targets that others in the digital-media space have.

The new company will be called Vice Media Group; Refinery29, which caters to a female audience, will continue to operate as an independent brand. It’s not clear at this point how many layoffs will result from the combo. However, the companies said that together, they will increase their investment in premium content production across all platforms by 20% on a year-over-year basis.

“This is an expansive moment for independent media,” Nancy Dubuc, CEO of Vice Media Group, said in a statement. She signaled that the acquisition isn’t about making cutbacks: “We will not allow a rapidly consolidating media ecosystem to constrict young people’s choices or their ability to freely express themselves about the things they care about most. At Vice and Refinery29, the megaphone is theirs to use and the platforms are theirs to build with us.”

Refinery29 focuses on a young female audience with lifestyle and entertainment verticals, events and premium content, promising to diversify Vice’s overall digital audience mix (which is currently 60% male). The hypothesis driving the deal: Vice will be able to take R29’s smaller business operations and integrate it into Vice Media’s larger and more global footprint.

Refinery29 co-CEOs and co-founders Philippe von Borries and Justin Stefano called the Vice pact a “transformational partnership” that will “allow our mission and business to flourish further.”

“We are proud to partner with Nancy and Vice Media Group,” the R29 execs said, “and we are confident that together we will be able to expand our vital role in shaping culture and positively impacting the world for young people everywhere.”

Word of the talks between Vice and Refinery29 talks emerged this summer, and comes as midsize media companies look to M&A to gain more heft and economies of scale. Last week Vox Media announced a deal to acquire New York Media, publisher of New York magazine and digital extensions like Vulture and The Cut.

The management structure for the combined Vice-R29 has yet to be sorted out, although Vice said the Refinery29 business will report directly into Dubuc.

Founded in 2005, Refinery29 had raised $133 million in funding from investors including Turner (now part of AT&T’s WarnerMedia), Discovery, WPP, Hearst and Stripes Group.

Dubuc has headed Vice since May 2018 after running A+E Networks, replacing co-founder Shane Smith in the CEO role. Since then, she’s worked to clean up the bro culture at the company, which started life in 1994 as a punk-culture magazine in Montreal. The Refinery29 deal will be a test of whether she has the right strategy to bring Vice into a sustainable future.

Vice once was valued at more than $5 billion valuation — but that’s take a hit in the past year. Disney wrote off $510 million of the value of its effective 21% stake in Vice Media. Vice earlier this year recently closed $250 million in debt financing from a group of new investors including George Soros’ investment fund. Other Vice investors include TPG, WPP, Raine Group, and ex-Viacom CEO Tom Freston.

With Refinery29, Vice claims that it will expand its global audience reach to 350 million unique visitors monthly, a 17% increase. The new company will produce over 1,700 pieces of content daily. Under Vice, Refinery29 will continue to program across verticals including fashion, beauty, money and lifestyle, as well as produce live experiences such as 29Rooms and a slate of premium original film and TV projects including “Shatterbox” and the upcoming series “Pride” for FX.

According to Vice, Refinery29’s offices in Los Angeles, London, Toronto and Berlin are “complementary to” Vice Media’s offices in the same cities. R29 has the opportunity to expand into Vice’s 30 additional locations.

The companies see benefits in not only expanding online reach but also gaining synergies in combining their content production, events and affiliate and e-commerce businesses. In addition, Vice’s Virtue in-house ad agency — with operations in 21 countries — will be able scale Refinery29’s advertising business, according the companies.

The combined Vice-Refinery29 will have a workforce that is majority women; according to Vice, its current employee base is equally split between men and women.

Pictured above (l. to r.): Vice’s Nancy Dubuc; Refinery29’s Justin Stefano and Philippe von Borries