Axios was acquired by Cox Enterprises on Monday, the companies announced, in a move to expand the digital news site’s reach.
If you think that sounds expensive, the company is valued at $525 million, which according to those privy to the terms of the deal, cannot be publicly disclosed. Co-founders Jim VandeHei, Mike Allen, and Roy Schwartz, will continue to help the company operate on a daily basis, according to the release. Alex Taylor, the Cox Enterprises CEO and chair, will join the Axios board.
Cox, which is based in Atlanta and is privately held, had previously invested in Axios in fall 2021. The company began talks with Axios several months ago, wanting the company’s drive into localized journalism, VandeHei says in an interview. As of 2017, Axios, which focuses on politics and business news, covers cities including Austin, Texas, Boston and Seattle, according to its website.
VandeHei described the transaction as “nice and easy,”
In addition, the buyer needed to be okay with us having control for a considerable amount of time, according to VandeHei. “We were looking for two things: a buyer that was authentically committed for the very long term to serious media.” That’s not because we’re haughty, but rather because we understand what a successful journalism business should look like.
According to VandeHei, who described the transaction as “nice and easy,” with talks escalating over the past few months, Axios never employed a banker and only spoke with Cox about a sale rather than seeking out other buyers. Axios had previously discussed merging with The Athletic and selling to Axel Springer, which The New York Times had acquired earlier this year.
The second media company VandeHei founded that was sold for more than $500 million was this one. He co-founded Politico, which Axel Springer purchased last year for $1 billion after he left to join Axios. Politico’s first employee was Allen, and its previous chief revenue officer was Schwartz.
Cox Owns Automotive And Cable Companies
Automotive and cable companies are owned by Cox. The company also owns other Ohio newspapers, including The Atlanta Journal-Constitution, The Dayton Daily News, and others, all of which will continue to run independently, according to the company. To private equity firm Apollo Global Management, it transferred control of the vast majority of its media assets in 2019.
While VandeHei, Allen, and Schwartz were not looking to sell, they did require more funding to expand the business into more regional markets. Cox believes its leadership has the ability to maximize local journalism’s monetization potential through a lean digital-first approach, said Dallas Clement, chief financial officer of Cox Enterprises. Despite the fact that some current investors were not interested in providing more capital, Cox felt that this was the right time for the company.
Axios has been profitable for the past three years, but a person with knowledge of the situation predicts that the publication will experience a loss in 2022.
An acquisition opportunity doesn’t always present itself, but in this case, it did, Clement said.
The software division of the business, Axios HQ, will split off and be run by its president, Schwartz.
According to Schwartz, “We are excited about beginning this new chapter with Cox and the opportunities we can explore with Axios HQ as a separate business.