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J2 Global (JCOM) to Rebrand as Ziff Davis With $1B Infusion

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J2 Global, Inc. recently announced that the company will be rebranding as Ziff Davis, Inc. in the third quarter of 2021.

Earlier this year, the company planned to separate the company into two independent publicly traded companies – J2 Global and Consensus – through a spin-off of at least 80.1% of the outstanding shares of Consensus common stock to J2 shareholders.

J2 Global, whose media assets include video game site IGN, PCMag and Baby Center, plans to begin trading on Nasdaq next month using the ticker symbol ZD, following a planned spin-off of its Consensus division, which will keep fax provider, eFax.

Moreover, the company is set to dedicate up to $1 billion for new media deals and acquisitions.  This $1 billion fund is expected to come from $350 million in the company’s cash reserves, roughly $400 million of debt capacity, plus an additional $250 million in borrowing capacity from the Consensus spinoff.

Strength in Digital Media Segment to Aid the Top Line

J2 Global’s digital media segment top-line growth is expected to be driven by gaming, broadband, B2B, parenting & pregnancy and everyday health professional businesses. In the second quarter of 2021, Digital Media revenues (59.1% of revenues) surged 54.8% year over year to $253.8 million.

Strength in the web properties and apps portfolio, which includes IGN, RetailMeNot, Mashable, PCMag, Humble Bundle, Speedtest, Offers, Black Friday, MedPageToday, Everyday Health, BabyCenter and What to Expect, among others has been a key growth driver and top-line contributor so far this year. In 2020, Digital Media web properties attracted around 9.1 billion visits and 31.5 billion page views.

IGN reaches more than 254 million monthly users across 28 platforms and is followed by more than 47 million social and YouTube followers with 500 million minutes watched monthly.

Moreover, an expanding subscriber base for Humble Bundle is a positive. Humble Bundle is a consumer subscription business, where users get access to a bundle of games at a steep discount. The games can be played at any time. The company is becoming one of the largest publishers of Indie titles in the industry. There are 60 games are in its development pipeline.

Further, J2 Global’s growth-by-acquisition policy holds promise. In April, the company acquired DailyOM, a California-based-based provider of health and wellness digital media, content and learning business.

Moreover, the company completed the acquisition of certain assets of HowLongtoBeat in the first quarter of 2021.

This Zacks Rank #2 (Buy) company continues to put in efforts to boost its performance despite increasing competition from peers like RingCentral (RNG - Free Report) , Zayo, Synchronoss Technologies (SNCR - Free Report) , 8x8 Inc. (EGHT - Free Report) and Open Text, among others. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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