Cox Enterprises will purchase Axios, the two firms said on Monday, with intentions to broaden the coverage of the online news source to more cities.
Axios is valued at $525 million as a result of the agreement, according to people with knowledge of the situation who declined to use their names because the deal’s financial details weren’t made public. The co-founders of Axios, Jim VandeHei, Mike Allen, and Roy Schwartz, will continue to serve on the board of directors and oversee daily operations, the firms announced in a press release. Cox Enterprises’ CEO and chair, Alex Taylor, will become a member of the Axios board.
In the fall of 2021, Cox, an Atlanta-based privately held company, made an investment in Axios. According to VandeHei, the corporation intensified acquisition negotiations with Axios a few months ago after becoming interested by its foray into local journalism. According to its website, local coverage of areas including Austin, Texas, Boston, and Seattle is provided by Axios, which began in 2017 and places a strong emphasis on politics and business news.
“We were looking for two things: a buyer that was authentically committed for the very long term to serious media, and someone who was fine with us being in control for a long time,” VandeHei stated.
“That’s not because we’re arrogant but because we have a clear mind about what a good journalism business looks like.”
According to VandeHei, who described the transaction as “pleasant and easy,” with negotiations intensifying over the previous few months, Axios never employed a banker and solely engaged with Cox about a sale rather than seeking out other purchasers. Axios had previously discussed selling to Axel Springer and merging with The Athletic, which The New York Times had previously acquired.
The media firm VandeHei built this time sold for more than $500 million, making it the second such company she has founded. He co-founded Politico, which Axel Springer purchased last year for $1 billion after he left to join Axios. Schwartz was Politico’s former chief revenue officer, and Allen was the publication’s first employee.
Cable and the automotive industries belong to Cox. The Atlanta Journal Constitution, the Dayton Daily News, and other Ohio newspapers are also owned by the corporation, which declared that they will continue to run independently. In 2019, it transferred management of the great bulk of its media assets to the private equity company Apollo Global Management.
Although VandeHei, Allen, and Schwartz had no intention of selling, they did require more funding to extend the business into more regional markets. Cox felt confident in the leadership’s capacity to monetize local journalism at scale with a lean digital-first approach, said Dallas Clement, chief financial officer of Cox Enterprises, in an interview. Despite the fact that some present investors were not interested in providing more funding, Cox thought that this was the right time for the company.
According to a source with knowledge of the situation, Axios has been profitable for the past three years but is anticipated to go into the red in 2022.
“You don’t always know when an acquisition opportunity will present itself, but here it did,” Clement said.
The software arm of the business, Axios HQ, will split off and be run by Schwartz, the publisher of Axios.
“We are excited about entering into this new chapter with Cox and the opportunities we can explore with Axios HQ as a separate business,” Schwartz said.