Fortress Seals $225 Million Deal to Acquire Vice Media Out of Bankruptcy
Fortress Investment Group has reached a widely expected deal to buy out the bankrupt Vice Media company along with a group of other buyers Thursday, according to multiple reports. CNBC, citing an internal memo, put the value of the deal at $225 million.
The New York Times reported multiple bidders had offered to acquire Vice, but only Fortress was deemed “qualified,” “meaning the others did not meet the bar Vice had set for buyers,” citing one of the sources. A bankruptcy judge must approve any deal before it goes forward.
Vice filed for Chapter 11 bankruptcy protection on May 15 after years of struggling to turn a profit and several rounds of layoffs.
Fortress is a longtime Vice backer, most recently dropping a $30 million infusion in February. It lent the company $250 million in 2019, along with investors Soros Fund Management, 23 Capital and Monroe Capital. The bankruptcy filing said that Vice Media has estimated liabilities between $500 million and $1 billion, including owing Fortress $475 million.
Fortress and members of this group of creditors took over Vice leading up to an auction that was scheduled for Thursday but was canceled. Vice will present the sale to bankruptcy court on Friday and expects the acquisition to close then, the company said in the memo obtained by CNBC.
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All told, investors including Disney, James Murdoch’s Lupa Systems, gave Vice $1.6 billion over the years, but the company hasn’t been able to turn a profit for some time. Moreover, its maneuvering to raise cash to keep it going left it with a complex organizational structure that made it difficult to keep up with its obligations.
Vice attempted to go public through a SPAC merger in 2021, but ended up abandoning talks and raising another $85 million.
Among the other companies that were reportedly interested in the company once valued at $5.7 billion was California-based GoDigital, a privately held group that owns Latino digital media giant NGLmitú and was prepared to submit a $300 million to $350 million bid, Axios reported Wednesday. Fortress wanted more cash in the offer and had concerns about GoDigital’s funding, according to CNBC.
Prior to the bankruptcy filing, business accelerator Group Black was reportedly also interested.
Vice started out as a magazine but grew into an alternative news outlet with an HBO program, movie and TV studio and ad agency. Disney toyed with buying the company in 2015 for $3 billion, but ultimately abandoned the idea.
Vice’s recent troubles include a terminated deal with partner Antenna to air Vice World News, which was worth $134 million a year. Ahead of the bankrupcty filing, the company canceled “Vice News Tonight,” and announced a restructuring that included an unspecified number of layoffs company wide.
Representatives from Vice Media and Fortress did not immediately respond to requests for comment and more details.
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