Cox Enterprises is Acquiring Axios in a $525 Million Deal

by contentwriter
Cox Enterprises is Acquiring Axios in a $525 Million Deal
Advertisements

Author: Ivy Finley

Founded in 2016, Axios board has decided to take growth to another level by agreeing to sell shares of the company to its lead investor, Cox Enterprises. According to the sources familiar with the buyout deal, the agreement values the company at $525 million.

Since Axios was originally focused on business, tech, and politics and has expanded to local news after a few years, the deal is said to ensure that investments will continue to grow in local news.

Basically, the agreement was pushed through due to both companies’ shared interest and dedication to local journalism.

More details of the Cox Enterprises and Axios deal 

Besides the overall goal to boost local journalism, there are relevant and interesting details that are included in the $525 million buyout deal. 

According to the Cox Enterprises chairman, a huge part of the deal is an additional investment in Axios’ media arm.

Advertisements

It was said in the reports that the investment amount is $25 million, which is designated to efficiently broaden Axios its paid subscription feature, both local and national.

Currently, Axios only covers 24 cities. With the deal, it plans to develop its coverage in 30 cities in the U.S. by the end of 2022. 

Meanwhile, the Axios president, Roy Schwartz, will lead the company’s software venture arm: Axios HQ. 

Since it is not part of the buyout deal, it will become a separate and independent company that pursues operation generationally, as stated by Axios CEO Jim VandeHei. 

Interestingly, Axios will continue to manage and control the company’s day-to-day operations and editorial direction. 

Advertisements

With that being said, there’s no doubt that the deal’s structure highlights the appreciation and trust of the Axios management team and current staff. Therefore, there may not be a significant change in the company’s operation.

On the other hand, the Axios HQ is projected to raise money and capital as early as next year. 

Since it will become an independent firm, it will rely upon raising money to fuel its growth. 

Currently, the company has over 300 clients, and it is expected to generate approximately $6 million in its annual recurring revenue. 

Advertisements

Axios founders remain on its board despite the buyout deal

Since Axios is still responsible for the day-to-day operations and editorial direction, it is not surprising to know that the Axios founders remain on its board. 

Under the buyout agreement, Axios and Cox Enterprises will share seats with Axios’ seven-person board members.

In particular, Cox Enterprises will have the majority, which is four slots on the shared seats, while the remaining three seats are reserved for Axios founders. With that being said, the deal gives Cox Enterprises just a 70% majority stake in the company. 

What’s next for Axios?

Even before Axios board agrees to sell to Cox Enterprises, it has always been profitable with its major revenue from its high-level brand awareness advertising — a service that attracts a lot of clients. 

Thus, it was successfully sold for roughly five times its projected revenue. With that track record, the possibility of improving local journalism and reaching its goals is high. 

Advertisements

Related Posts

Leave a Comment