The US digital news site Axios announced on Monday that it will be acquired by Cox Enterprises. Cox Enterprises plans to expand Axios’ local news coverage to more cities. The deal valued Axios at $525 million, according to people familiar with the matter. Axios co-founders Jim VandeHei, Mike Allen, and Roy Schwartz will remain on the company’s board of directors and continue to run Axios’ day-to-day operations. Alex Taylor, CEO, and Chairman of Cox Enterprises will join Axios’ Board of Directors.
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Cox Enterprises, a privately held company headquartered in Atlanta, USA, invested in Axios in the fall of 2021. Encouraged by news reports of Axios’ foray into local areas, Cox Enterprises ramped up talks to acquire Axios a few months ago, Van der Hey said in a previous interview. Founded in 2017, Axios used to focus on political and business news but has since also provided local news coverage in cities like Austin, Boston, and Seattle.
“We’re looking for two things, a genuine commitment to serious journalism, and a willingness to let us take over the company for the long haul,” says Van der Hey. “It’s not because we’re arrogant, it’s because we know exactly what a good news outlet is. What is it like.”
He also said that Axios had never hired bankers to handle the sale, and had only discussed the deal with Cox Enterprises, not other potential buyers. He described the deal as “good and easy”. Axios had previously discussed a sale to publisher Axel Springer and a merger with The Atlantic. The Atlantic was eventually acquired by The New York Times earlier this year.
This is the second time Van der Hey has launched a media company that sells for more than $500 million. He is the co-founder of the political media Politico. After his departure from Politico, Politico was sold to Axel Springer last year for $1 billion. Allen is Politico’s first hire, and Schwartz was previously Politico’s chief revenue officer.
Cox Enterprises owns cable and automotive businesses, in addition to holding several local news outlets, including the Atlanta Gazette, the Dayton Daily News, and other Ohio outlets. These media outlets will continue to operate independently. In 2019, Cox Enterprises sold most of its media assets to private equity giant Apollo Global Management.
Van der Hey, Allen, and Schwartz had not planned to sell Axios, but they needed more capital to expand Axios into more local markets. Cox Enterprises CFO Dallas Clement said in an interview that while some existing investors are not interested in raising capital, Cox Enterprises believes that Axios’ management has the ability to move through a lean, digital-first approach, to promote the large-scale profitability of local news reports.
Axios has been profitable for the past three years but expects to post a loss in 2022, according to people familiar with the matter. “You don’t always know when there’s an acquisition opportunity, but this time, it did,” Clement said.
After the transaction closes, Axios HQ, Axios’ software business, will become a separate entity, led by the company’s president, Schwartz. “We are excited to enter this new chapter with Cox Enterprises and have the opportunity to explore how Axios HQ can grow as a standalone business,” said Schwartz.
