Axios is set to sell Cox Enterprises to itself for $525 million.

Axios, a digital media company that has dominated the political, business and technology sectors since its inception five years ago, has agreed to sell itself to Cox Enterprises, two people familiar with the matter said. Agreement.

The deal values ​​Axios at $525 million, the people said, speaking on condition of anonymity to discuss confidential terms of the deal. The transaction, which will close this month, is expected to be announced on Monday.

The deal is structured around the company’s three founders – Jim Vandahey, CEO; Roy Schwartz, President; and Mike Allen, a journalist—have financial incentives to stay with the company. Each will become a minority shareholder and continue to make day-to-day newsroom and business decisions. Alex Taylor, CEO and Chairman of Cox Enterprises, will join the Axios board.

Shortly after Axios was founded in 2017, it became a Beltway media outlet, where readers read about President Donald J. They devour stories about Trump and his administration. Jonathan Swan, Axios’ national political correspondent, gained attention for his on-camera conversations with Mr. Trump and White House officials, while reports from reporters such as Dan Primack and Sarah Fisher caught the attention of the business group.

The deal offers a rare boost to the digital publishing sector, which has struggled for investors and operators over the past decade. Some of Axios’ peers have struggled to go public, sell or raise funding while investors have cooled on digital advertising.

Axios is selling at about five times its projected revenue of more than $100 million by 2022, said one of the people familiar with Axios’ presentation to the board. The company has been profitable for the past three years but is not expected to be profitable in 2022, in part because of investments in its headquarters’ communications software division, the person said.

In an interview, Mr. Vandehey said the company’s founders decided to sell now that they had found a buyer committed to journalism and would pay a reasonable price, allowing former investors NBCUniversal and Emerson Collective to welcome Akios. A significant return.

Mr Vandehey said it was important to him that any deal kept the management team in place, as he did not intend to step aside any time soon.

“Not a chance,” said Mr. Vandehey. “This is my life’s work, my passion. I would have done it for free.”

The agreement was signed in It provides a coda of sorts to the founders of Axios, who helped Mr Vandy Hey, when he left Politico in 2016 amid a battle over that company’s future. He, Mr. Allen and Mr. Schwartz launched Axios the following year. Politico went on to sell itself to German publishing company Axel Springer last year for $1 billion.

Cox Enterprises is not buying HK, spinning off Axios into a separate company. Mr. Schwartz is chief executive of that company and Cox will take a minority stake, said one of the people familiar with the deal while Mr. Vandehey served as chairman.

The deal to acquire Axios will restore the media base of Cox Enterprises, a private company based in Atlanta that generates most of its revenue from its cable and broadband businesses. The company started in In 1898, James Middleton Cox purchased what is now The Dayton Daily News for $26,000. In the year In 1939 Mr. Cox purchased the Atlanta Journal-Constitution, and the company still owns both publications.

“It’s a big part of who we are and what we do,” Mr Taylor said. “We have been in the news business for 124 years; This shows the legacy that our ancestors left us.

Cox Enterprises, which previously held a minority stake in Axios, is putting $25 million in cash into its account to support the company’s growth. Mr. Vandehey said Axios plans to build subscription products similar to those offered by Politico Pro, including technology, politics and legislative policy.

Axios also plans to continue launching additional regional editions in 24 cities, including Philadelphia, Des Moines and Nashville. Mr. Vandehey said the company aims to be in at least 100 cities in the coming years.

“Hopefully, with Politico first, and Axios today, we’ve shown a way for serious journalism to thrive in the digital age,” Mr Vandehey said. “This country desperately needs it.”

Axios’ next big test will be how its coverage of the upcoming midterm elections and 2024 presidential election cycle stacks up against some of its deeper-pocketed competitors. Mr. Vandehey said the company planned to hire more reporters for the campaign, noting that quality coverage was about getting experienced reporters rather than having “100 boots on the ground.”

Mr Vandehey said he was upbeat about the prospects for the digital media sector despite the turmoil plaguing the industry. He points to business-oriented outlets like The Information and Morning Brew, which have developed loyal readers in a tough market.

“Education in the digital age: Chase fads, fantasy and clicks, you either perish or starve,” said Mr Vandehey. “Chase loyal audiences with quality information, and you’ll thrive.”

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