Axios agrees to Sell to Cox Enterprises for $525 million

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Author: Allan Dave

Cox Enterprises will purchase the popular digital media startup formed in 2017.  The deal, which values Axios at $525, was announced and it’s anticipated to finalize this month. 

This is significant news for the media sector as it represents another considerable industry consolidation. 

Axios is renowned for providing news in concise publications with bite-sized chunks of information. The magazine is also famous for its well-liked newsletters, which frequently shape public discourse across the country, particularly in Washington, DC. 

However, Jim VandeHei, Mike Allen, and Roy Schwartz, the three co-founders of Axios, will continue to oversee the publication’s daily editorial and commercial choices.

According to Cox Enterprises, VandeHei, Allen, and Schwartz will keep significant holdings in the corporation. Cox Enterprises, with four board seats, will control the board, while the three co-founders will continue to serve on it.

The deal occurred a year after rumors of a separate takeover surfaced.

Rumors of the purchase of the platform surfaced in the spring of 2021. However, Politico was acquired by the website’s purported suitor, German media juggernaut Axel Springer.

According to Axios, Cox Enterprises had already committed financially to the publication. Therefore, the corporation played a significant role in generating $55 million in self-reported financing rounds. 

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Since it has always been lucrative, the website stated on Monday that Axios still has a substantial amount of cash.

The transaction may be advantageous for Axios employees because the website has previously stated that EVERY staff is a shareholder of the business. 

Axios’ pricing is more than five times greater than the $100 million earnings it was expected to generate this year. 

The purchase arises as Axios prepares to launch three regional newsletters this month in Miami, Houston, and San Francisco. The firm announced in July that it had exceeded a million subscribers in 24 regions for its Axios Local newsletters.

According to reports, more than half of the business’s recent revenues have come from its newsletters.

Executives say local news will be their emphasis.

The CEOs of the two businesses claim that a common objective unites them. That is, enhancing local journalism at a moment when the internet has decimated news organizations all over the United States.

In a statement by Cox, Axios CEO and co-founder Jim VandeHei said, “We have uncovered our great partner for building a great, credible, significant media firm that can outlive us all. 

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Our common goals should be clear: to rapidly disseminate scholarly, neutral, reputable news to as many cities and themes as feasible.”

In a second statement, Cox chairman and CEO Alex Taylor stated that “local watchdog journalism is so crucial to the health of any town. Nobody is more dedicated to spreading that out nationwide than Axios.”

Axios founders will continue to serve on its board.

According to the terms of the agreement, the two firms will split the seven seats on Axios’ board. 

Cox will receive four seats, and VandeHei, Allen, and Schwartz holding the other three. 

This is fantastic for Axios, our investors, and American journalism, added VandeHei.

According to Axios, the agreement calls for Cox to contribute $25 million to expanding Axios’ publishing business. 

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Axios HQ, a software project that will separate into its own business and engage with corporate communications departments, is not included in the transaction.

Next steps

Because of their mutual interest in regional journalism, Cox and Axios claim that this is a good fit. Axios Local, a company division that offers local newsletters in 22 US regions, reached 1 million members this summer.

The agreement will give Cox 70% ownership in the company, and the $500,000 valuation—roughly five times Axios’s anticipated revenue for 2022—will provide early investors with a sizable return. Axios’s communications software section HQ, which is not included in the deal, will become a separate entity. 

What Does This Mean for Axios?

Well, for starters, the company will have access to Cox’s vast resources, which will help it grow and reach more people. 

In addition, Cox is known for its commitment to journalistic ethics and integrity. So, Axios can be confident that it will maintain its high standards under the new ownership.

What Does This Mean for Cox Enterprises?

It’s a big move for Cox Enterprises. With this acquisition, they’re getting big into the digital media space. Axios has carved out a niche as a trusted source of news and insights, which Cox Enterprises will easily tap into.

Summary

Axios, a digital media company, has agreed to sell to Cox Enterprises for $525 million. This deal will give Cox Enterprises ownership of Axios’ core product, a news outlet aimed at millennials. This is big news for the media industry, as it marks another major consolidation in the space. And it’s also a big win for Axios, which will now have the resources to grow even faster. We’ll keep you updated on all the latest developments as they happen.

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