Red Ventures, of the US, is acquiring the CNET Media Group of tech sites from ViacomCBS for $500m (5 x revenue). The brands include: ZDNet, Metacritic, Chowhound, TVGuide and Gamespot. CBS had acquired CNET for $1.8bn in 2008, a decade before its merger with Viacom.
The deal is expected to propel the acquisitive online media group to more than $1.6bn of revenue in 2021. It will have almost 4,000 employees worldwide.
The CNET acquisition is believed to be Red’s second largest deal. In 2017, it acquired the personal finance site Bankrate for $1.24bn. The fast-growing company was founded in North Carolina, US, in 2000 by CEO Ric Elias. It has bought and built a portfolio of over 100 sites and now claims a monthly reach of over 300m with brands including: The Points Guy, Healthline, Greatist, HigherEd, and BankRate across entertainment, finance, health and education.
Like CNET, many of the sites are built round reviews which generate affiliate e-commerce and lead gen revenues. Earlier this year, it acquired PsychCentral (mental health), Slumber Yard (reviews mattresses), and Cord Cutters News (online TV reviews).
In June, Red Ventures announced a partnership with Time magazine to launch a new version of NextAdvisor, a personal finance brand which Red had acquired with BankRate in 2017. It is also believed to have content sharing arrangements with Business Insider.
CNET (originally Computer Network) was founded in 1992 and became one of the most popular tech networks globally in the early days of the web. It was acquired by CBS in 2008 for $1.8bn. Since then, it has faced fierce competition from newer sites including Vox Media’s Verge, Gizmodo (G/O Media), TechRadar (Future), and TechCrunch (Verizon). In recent years, CNET has shifted much of its focus to video streaming.
Ric Elias, who had started his career as part of GE’s Financial Management program, says his whole attitude to life and work has been transformed by his experience in January 2009. Returning home to Charlotte, NC, he was on the “Miracle on the Hudson” flight (subject of a hit movie). The US Airways pilot had been forced to make an emergency landing on New York’s river just moments after takeover. Miraculously, everybody survived with no serious injuries. But it was truly a near-death experience for the Red CEO and fellow passengers.
Red Ventures is believed to be on course for 2020 revenues of some $1.5bn with EBITDA margins of almost 40%. The company is 75% owned by Elias and his founding business partners, with the remainder held by investors including General Atlantic (which bought a stake in 2010) and Silver Lake Partners (2017).
The Wall Street Journal this week reported estimates that Red was valued at $10 billion. The CNET deal was funded by bank debt which may now total almost $2.5bn. Elias has said he plans never to sell or IPO but “to create a generations-old company”.