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Axios to sell itself to Cox Enterprises for $525 million

Axios is being acquired by Cox Enterprises, the companies said Monday, with plans to expand the digital news site’s coverage to include more cities.

The deal values Axios at $525 million, according to people familiar with the matter, who asked not to be named because financial terms of the deal weren’t disclosed. Axios co-founders Jim VandeHei, Mike Allen and Roy Schwartz will remain on the company’s board and continue to manage its day-to-day operations, the companies said in a release. Alex Taylor, the CEO and chair of Cox Enterprises, will join the Axios board.

Cox, which is privately held in and based in Atlanta, had previously invested in Axios in fall 2021. The company ramped up talks to buy Axios several months ago, intrigued by the company’s push into local journalism, VandeHei said in an interview. Axios, which focuses heavily on politics and business news, launched in 2017 and offers local coverage of cities that include Austin, Texas, Boston and Seattle, according to its website. CNBC

“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 said. “That’s not because we’re arrogant but because we have a clear mind about what a good journalism business looks like.”

Axios never hired a banker and only spoke with Cox about a sale, rather than soliciting other buyers, said VandeHei, who described the deal as “nice and easy,” with talks escalating over the past few months. Axios had previously held talks to sell to Axel Springer and to merge with The Athletic, which The New York Times bought earlier this year.

This is the second time VandeHei has founded a media company that sold for more than $500 million. He co-founded Politico, which sold for $1 billion to Axel Springer last year after he had departed for Axios. Allen was Politico’s first hire and Schwartz was Politico’s former chief revenue officer.

Cox owns cable and automotive businesses. It also owns The Atlanta Journal Constitution, the Dayton Daily News and other Ohio newspapers, which the company said will continue to operate independently. It sold control over the vast majority of its media assets in 2019 to private equity firm Apollo Global Management.

VandeHei, Allen and Schwartz weren’t look to sell, but they did need more money to expand the company into more local markets. While some current investors weren’t interested in adding more capital, Cox felt confident in the leadership’s ability to monetize local journalism at scale with a lean digital-first approach, said Cox Enterprises Chief Financial Officer Dallas Clement in an interview.

Axios has been profitable for the last three years but is expected to lose money in 2022, according to a person familiar with the matter.

“You don’t always know when an acquisition opportunity will present itself, but here it did,” Clement said.

Axios HQ, the company’s software component, will become a separate entity led by Schwartz, president 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. CNBC

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