Finalization of a deal has seen Gizmodo sold from Univision to Great Hill Partners, an investment firm specializing in businesses worth $25–$500 million. Univision had originally acquired Gizmodo back in 2016 when its parent company Gawker was faced with bankruptcy. It had represented the first foray into English-language media for a company that was primarily focused on television media.
Why was Gizmodo sold? Well, despite a fresh cash injection from a new owner following the Gawker bankruptcy, the Gizmodo Group struggled to make a profit in the intervening years. Univision had been searching for someone to purchase the company as early as June 2018, less than three years after it had originally acquired the company. Although Gizmodo and its associated websites are estimated by sources to bring in $70–$80 million every year, it has nonetheless been struggling to make a profit in an increasingly-competitive digital market.
The financial troubles have ultimately seen Gizmodo sold to Great Hill Partners, a firm that specializes in snapping up businesses for a few years and turning them around. Typically, Great Hill Partners will invest $40–$250 million into companies valued at $25–$500 million and remain involved in their investment for 3–7 years. Great Hill Partners will likely do as investment firms do: turn a flagging business around in exchange for some board seats, a bit of equity, and a hefty return on their investment.
The sale of Gizmodo sees a number of notable properties coming along with its flagship site including The Onion, a longstanding satire website that does a scarily good job of looking just a little too much like real news. Jezebel, Deadspin, and Lifehacker are also included in this deal that will see the formation of a new company called G/O Media Inc. headed by James Spanfeller, former CEO of Forbes.com. The new boss of the Gizmodo Media Group plans to focus on a strategy combining paid content and e-commerce.
[via Ben Mullin on Twitter]
