Forbes to be acquired by Luminar Technologies' Austin Russell
Austin Russell, the CEO of electric vehicle technology company Luminar Technologies, has entered an agreement to acquire an 82% stake in Forbes.
Why it matters: Forbes' majority owner, a Hong Kong-based investment firm called Integrated Whale Media, has been trying to sell the company for years.
Catch up quick: The group was planning to sell Forbes to a consortium of investors led by Indian investment firm Sun Group, but removed Sun Group as the lead investor because Forbes management believed regulators would object, Axios reported.
Details: In a statement, Forbes confirmed that Russell had agreed to acquire an 82% majority stake in the firm.
- A source said that the transaction valued the company at $800 million, which is what the consortium group of investors had been targeting as a valuation for months.
Yes, but: The statement doesn't include details about how Russell financed the deal.
- Sources told Axios that the firms that were interested in buying Forbes as a part of the original consortium bid, including Sun Group and GSV Ventures, a Silicon Valley-based investment group, are likely still involved in the deal.
- Bringing Russell in as majority stakeholder will help alleviate regulatory concerns about Sun Group's involvement as well as the involvement of other overseas investors.
- Forbes didn't comment on the financing structure of Russell's bid. GSV and Sun Group did not immediately respond to a request for comment.
What they're saying: "This is an important milestone in Forbes' storied history, and an achievement that everyone on the Forbes team should be proud of," said Forbes CEO From Mike Federle.
- "Over 105 years, innovation has been part of Forbes' DNA and has kept us at the forefront of our industry. It is only fitting that now through this transaction, a true innovator and visionary, Austin Russell, will be the new steward for the brand."
The big picture: The deal ends a long, drawn-out sale process for Forbes.
- Forbes tried to go public via a blank check merger last year, but pulled the plug on the process due to regulatory concerns over the financing of the deal and a slowdown in the markets.
- The company then began talks with the investor consortium last year. It was close to a deal with that group earlier this year — and was expecting to close a deal by the end of March — until management became concerned with regulatory headaches, forcing the consortium to pivot to a bid structure that would have an American executive as the face of the bid, three sources familiar with the bid told Axios.
What to watch: Whether and how Russell will disclose how he is funding his stake.
- A spokesperson for Russell didn’t comment on whether GSV and Sun Group were participating in the bid. A statement from the spokesperson read: "All capital for the acquisition has been fully committed and independent of his stake in Luminar."
Editor's note: This story has been corrected to show that Austin Russell has entered an agreement to acquire Forbes, not that he has already acquired it.