JUST IN: Axios Reaches Deal to Sell to Cox Enterprises for Over Half a Billion Bucks

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Axios has entered into an agreement with Cox Enterprises, selling the digital media company in a $525 million deal that keeps the current management involved.

Ben Mullin with the The New York Times was the first to report the story, citing two sources with knowledge of the deal. The terms of the sale keep the company’s founders — chief executive Jim VandeHei, president Roy Schwartz, and executive editor Mike Allen (pictured above) — on board with “financial incentives to stay at the company,” Mullins wrote, with each becoming a minority shareholder and “continu[ing] to make day-to-day newsroom and business decisions.”

Keeping the founders involved was key to getting the deal closed; VandeHei described the site as his “life’s work” and “passion” and said he had no intention to step aside any time soon. Cox Enterprises’ CEO and chairman Alex Taylor will also join the Axios board.

Mullins reported details about the financial aspects of the deal, noting the challenges of the digital media environment:

The deal offers a rare flicker of hope for the digital publishing sector, which has been fraught with difficulty for investors and operators over the last decade. Some of Axios’ peers have struggled to go public, sell or raise funding at favorable valuations as investors cooled on digital advertising, a market dominated by tech giants like Google, Meta and Amazon.

Axios is selling at roughly five times its projected 2022 revenue of more than $100 million, according to one of the people, who was familiar with a presentation Axios made to its board. The company was profitable for the last three years but is not expected to be profitable in 2022, partly owing to investments in HQ, its communications software division, the person said.

Axios HQ will be spun out into a separate company. The site plans to continue its expansion into regional markets, with VandeHei saying he wants to build their current roster of 24 cities into at least 100 over the next few years.

Axios has made a strong name for itself since its founding five years ago, characterized by bullet-pointed news summaries, interviews of prominent figures by national political correspondent Jonathan Swan, and multiple topic-based newsletters.

The site officially announced the news itself shortly before 10:00 am ET, noting that Cox Enterprises was the company’s “most recent lead investor” and confirming the sales price of $525 million.

“Axios is one of a tiny handful of digital news startups that have sold for more than $500 million in enterprise value in the past decade,” wrote Axios’ Sara Fischer, touting the site’s profitability and expansion over its five-year existence. “The deal is expected to close within the next few weeks, following regulatory approvals.”

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