Axios, valued at $525 million, to be sold to Cox Enterprises in major media deal

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Cox Enterprises said Monday it has acquired majority control of Axios, a five-year-old digital news company headquartered in Washington.

The companies didn’t announce what Cox paid, but the Atlanta-based publisher will own 70 percent of Axios, which the two parties said was worth $525 million.

Axios’s three founders and its employees will retain about 30 percent of the ownership. The company has about 500 employees spread across several operations and cities, including Axios HQ, a communications software company.

The sale is a huge payday for Axios’s investors, including employees and founders. The site launched in 2017 and quickly grew into a well-read purveyor of news and analysis about politics, government, technology and media. Axios also struck TV deals with HBO and MSNBC, giving it an immediate promotional boost.

Axios’s early investors included NBCUniversal and Emerson Collective, the private corporation founded by Laurene Powell Jobs, the widow of Apple co-founder Steve Jobs. (Emerson bought majority control of the Atlantic magazine in 2017 and has a stake in Gimlet Media, a leading podcast producer.)

Cox, a 124-year-old media company, had already been a minority investor in Axios before the sale, which is the second major transaction involving a Beltway digital news company in the past year. In October, German publisher Axel Springer purchased Arlington-based Politico for $1 billion after discussing a bid to buy Axios.

One of the co-founders of Axios, chief executive Jim VandeHei, was also a co-founder of Politico but left the company in 2016 in a dispute over its management. VandeHei, a former Washington Post reporter, launched Axios the following year with two Politico alums, columnist Mike Allen and digital strategist and business manager Roy Schwartz, who is Axios’s president.

The three co-founders will remain in their present roles with the company, Cox said in an announcement Monday morning. They will also hold three of seven board seats.

Axios, which uses a crisp format on its articles that it calls “Smart Brevity,” is one of the few successful digital news start-ups of recent years. The digital media sector has been rife with new entrants over the past decade or so, but even well-funded titles have struggled to find a steady audience and revenue in a business dominated by giants such as Facebook and Google. The pandemic has exacerbated the difficulties and uncertainty surrounding digital advertising.

Not so for Axios, which turned profitable two years after it was started, according to Dallas Clement, the president and chief financial officer at Cox.

“Obviously, media has gone through a variety of disruptions over the past few years,” he said in an interview. “We have been looking for new models [and] we thought Axios brought something new to the table.”

“What Axios does is different” from its competitors, he added. “It does real reporting of real stories.”

Axio’s website attracted 19.4 million unique visitors in June, according to ComScore, placing it far behind leaders such as CNN.com (122.0 million) and the New York Times (87.9 million), but ahead of digital news offered by such legacy organizations as Time (14.6 million) and ABC News (14.3 million.). The Washington Post’s website drew 64.8 million unique visitors in June, according to ComScore.

Axios also publishes newsletters and local news sites in 22 cities, with plans to expand to dozens of other cities.

The company’s stars are Allen, another former Post reporter who started the popular Playbook column while he was at Politico; and Jonathan Swan, who broke numerous stories as a White House reporter and conducted probing interviews with newsmakers on Axios’s weekly HBO program.

“We have found our kindred spirit for creating a great, trusted, consequential media company that can outlast us all,” VandeHei said in a statement on Monday.

Cox is a private company, closely held by the descendants of its founder, James M. Cox. Its extensive media holdings include cable TV systems, TV stations and newspapers such as its flagship, the Atlanta Journal-Constitution. It also operates an automotive division that owns Autotrader, Dealer.com and Kelly Blue Book.

Axios’s estimated value is similar to another digital start-up, the sports-journalism site the Athletic, which the New York Times bought for $550 million earlier this year.

Clement said he expected the sale to close in the next two months.

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