Axios Sells to Lead Investor Cox Enterprises for $525 Million

The deal signed Sunday includes a $25 million investment to the company’s media arm to expand its local, national and subscription news products

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Digital news publication Axios has agreed to sell to its most recent lead investor Cox Enterprises in a deal valued at $525 million, the companies announced on Monday.

The deal, which was signed on Sunday, will help Axios sustain its local journalism operations and expand its local, national and subscription news coverage, and it will also provide an immediate $25 million investment to help support its growth. The deal is expected to close in the next few weeks following regulatory approvals.

“A big part of this investment is to expand the number of local markets we serve. Local watchdog journalism is so important to the health of any community, and no one is more focused on building that out nationally than Axios,“ Cox Chairman and CEO Alex Taylor said in a statement.

“This is great for Axios, for our shareholders and American journalism. It allows us to think and operate generationally, with a like-minded partner – and build something great and durable that lives long after we are gone,” VandeHei said in a statement.

Axios was founded in 2016 by Politico co-founders Jim VandeHei, Mike Allen and president Roy Schwartz, all of whom will remain on the company’s board, and in 2020 began a significant expansion into local news. It currently operates in 24 U.S. cities and hopes to expand to 30 by the end of 2022. Axios said the deal was valued at $525 million and projects to reach $100 million in revenue by the end of this year.

Cox will take control of the company’s media arm and will hold four board seats, with Cox chairman and CEO Alex Taylor serving as one of the board members. Axios’ management will maintain control of the company’s editorial direction and day-to-day operations.

Axios will also spin off its software arm, Axios HQ, into a separate, standalone company led by Schwartz. It will receive some seed capital, with plans to raise money early next year to fuel its growth as an independent firm and this year expects to bring in $6 million in annual recurring revenue.

Axios last year was in talks to sell to German publishing giant Axel Springer, but the deal fell through following accusations of workplace misconduct as reported in the New York Times.

Axios covers politics, science, business, health, tech and media and has been known for its editorial style that aims to condense complex topics into easily digestible newsletters and articles structured via bullet points. It also has a show on HBO and a TV partnership with MSNBC, and the company has roughly 500 employees that encompass the editorial department, Axios HQ and Axios Local.

Cox Enterprises still owns the Atlanta-Journal Constitution but sold a majority stake of its local TV and radio businesses to private equity firm Apollo Global Management in 2019.

The Axios deal follows a wave of M&A specifically in the media realm, including the sale of The Athletic to the New York Times for $550 million earlier this year and the sale of Politico last year in a deal valued at roughly $1 billion.