Arlington media company Axios has agreed to sell itself to its lead investor for $525 million with an eye toward significantly beefing up its coverage of local news
Axios, established in 2016 by the journalists who founded Politico, said Monday the deal with Cox Enterprises will include an “immediate” $25 million investment into Axios’ media arm to help it expand its local, national and subscription news products.
Cox Chairman and CEO Alex Taylor said a key motivator for the acquisition is expanding Axios’ reach into more markets at a time when many local newspapers are closing or severely cutting staff. Axios launched its local news division in 2020 and now has about 75 reporters covering news in 24 cities across the U.S. It aims to be in 30 cities by the end of the year and eventually have a presence in hundreds of markets.
Axios employs some 500 people across the company.
"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," Taylor said in a statement.
Cox Enterprises has two primary lines of business: Cox Communications and Cox Automotive. Cox Communications is one of the nation’s largest internet and cable television providers and the automotive subsidiary operates such brands as AutoTrader and Kelly Blue Book. The privately held company, based in Atlanta, had revenue of roughly $21 billion last year.
Cox sold off many of its radio and television stations in 2019 but still owns a handful of local newspapers, including the Atlanta Journal-Constitution.
Axios CEO and co-founder Jim VandeHei said in a statement that the sale to Cox will allow Axios to accelerate its ambitious growth plans and “build something great and durable that lives long after we are gone.”
VandeHei, along with Axios co-founders Mike Allen and Roy Schwartz, will remain on the board of Axios’ media arm. Cox board members will have four seats on the newly constructed board of directors.
Axios also said that its Axios HQ unit will be spun off into a new company with some seed capital and plans to raise additional money early in 2023 to fuel its growth as an independent firm. The unit launched in 2021 to help companies streamline and simplify communications to employees, shareholders and customers, using proprietary software.
The software uses artificial intelligence to distill blocks of texts into shorter bullet points and Axios HQ’s analytics show the clients whether the messages were opened. Axios HQ now has 100 employees, 300 clients and about $6 million in annual revenue has set a goal of doubling its size in 2023 and tripling its revenue. Schwartz, now Axios’ president, will lead the new, stand-alone company.
Axios’ sale would be the second in recent weeks announced by a local media startup. Industry Dive, the D.C.-based publisher of 27 digital business-to-business publications, said last month it has reached an agreement to be acquired by Informa PLC, a London-based business-to-business publishing and events company, for $389 million in cash.
Informa is buying Industry Dive from Charlotte, North Carolina, private equity firm Falfurrias Capital Partners.
It would also be the latest digital news startup to be sold for more than $500 million. The New York Times bought the sports news website The Athletic earlier this year for $550 million, and last year, Politico was acquired by German publisher Axel Springer reportedly for $1 billion-plus.
Axel Springer was also reportedly in talks to acquire Axios last year but those talks fell through amid concerns about the parent firm's workplace culture.
