BuzzFeed owes NBCUniversal extra stock if it IPOs at a lower valuation

Last month, Recode reported that NBCUniversal was pouring another $200 million into BuzzFeed, a year after it first put a separate $200 million into the digital-media publisher. Now we have some more details on the new round.

The Series G investment by NBCUniversal includes several safety nets to assure that the TV and movie company at least makes its money back in the event of a BuzzFeed sale or IPO, according to Delaware incorporation filings obtained by CB Insights.

The deal includes a so-called “ratchet,” a provision that states BuzzFeed will have to issue NBCU more shares to make up the difference if it IPOs at a price below what NBCU paid in this round (after accounting for any dividends received by the investors).

Recode previously reported that the new investment values BuzzFeed at around $1.7 billion post-money. (Disclosure: NBCU is a minority investor in Recode owner Vox Media.) The protection lasts for 27 months.

The terms of the deal also stipulate that NBCU will get paid back ahead of earlier investors in the event of a sale of BuzzFeed, the documents show.

Ratchets are not uncommon, and in most cases offer the investor a return above their investment. For example, Jack Dorsey’s payments firm Square had guaranteed some late-stage investors a 20 percent return on their investment in an IPO. When Square didn’t hit the mark, it owed them $93 million in new shares.

In this case, however, NBCU would only be made whole on the latest $200 million round, without a guaranteed profit. (NBCU also wouldn’t get any guarantees on its earlier $200 million investment.) Insiders at BuzzFeed say that won’t matter, since the company wouldn’t consider going public if it felt it couldn’t go well above its current valuation. The publisher is currently looking at 2018 for a possible IPO, according to a source.

Spokespeople for BuzzFeed and NBCU didn’t immediately respond to requests for comment.

This article originally appeared on Recode.net.