The deal, which is set to close this month, values Axios at $525 million, according to two people familiar with the deal. The deal is structured so that the company’s three founders — Jim VandeHei, the CEO. Roy Schwartz, the president? and Mike Allen, a journalist — are financially motivated to stay with the company. Each of them will be a minority shareholder and will continue to make day-to-day newsroom and business decisions. Alex Taylor, CEO and president of Cox Enterprises, will join Axios’ board of directors. Axios became a Beltway media staple shortly after its founding in 2017, with readers devouring stories about President Donald J. Trump and his administration. Jonathan Swan, Axios’ national political correspondent, gained attention for his probing conversations with Mr. Trump and White House officials, while newsletters from reporters such as Dan Primack and Sarah Fisher caught the attention of the business set . Axios is selling for about five times its projected 2022 revenue of more than $100 million, according to a person familiar with a presentation Axios made to its board. The company has been profitable for the past three years but is not expected to be profitable in 2022, partly because of investments in HQ, its communications software division, the person said. In an interview, Mr. VandeHei said the company’s founders decided to sell now because they found a buyer who was committed to journalism and would pay a fair price, allowing investors who backed Axios early, including NBCUniversal and Emerson Collective, to receive a meaningful return. Mr VandeHei said it was also important to him that any deal allowed the management team to remain in place because he did not plan to leave anytime soon. “No way,” said Mr. VandeHei. “This is my life’s work, it’s my passion. I’d do it for free.” The deal provides a code of sorts for Axios’ founders, who left Politico in 2016 amid a tug-of-war over the future of that company, which Mr. VandeHei helped found. He, Mr. Allen and Mr. Schwartz started Axios the following year. Politico went on to be sold to German publishing group Axel Springer for $1 billion last year. Cox Enterprises is not acquiring HQ, which Axios is spinning off as a separate company. Mr. Schwartz will be chief executive of that company, and Cox will take a minority stake, with Mr. VandeHei serving as chairman, a person with knowledge of the deal said. The deal to acquire Axios stems from the media roots of Cox Enterprises, a family-owned private company based in Atlanta that generates most of its revenue from its cable and broadband businesses. The company traces its beginnings to 1898, when its founder, James Middleton Cox, purchased what is now The Dayton Daily News for $26,000. In 1939, Mr. Cox purchased the newspaper that would eventually become 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’ve been in the news business for 124 years and that speaks to the legacy our grandparents left us.” Cox Enterprises, which already owned a minority stake in Axios, is putting $25 million in cash on its balance sheet to fund the company’s growth. Mr. VandeHei said Axios planned to build a series of subscription products, similar to what Politico Pro offers, on topics such as technology, politics and legislative policy. Axios also plans to continue launching more regional editions, which already exist in 24 cities, including Philadelphia, Des Moines and Nashville. Mr. VandeHei said the company aims to be in at least 100 cities in the next few years. “Hopefully, with Politico first, and Axios today, we’ve shown a way for serious journalism to thrive in the digital age,” Mr. VandeHei said. “This country needs it so desperately.” Axios’ next big test will be how its coverage of the upcoming midterm elections and the 2024 presidential election cycle stacks up against some of its deeper-pocketed competitors. Mr. VandeHei said the company planned to hire additional reporters for the campaign, noting that quality coverage was more about finding experienced reporters than having “100 boots on the ground.” Mr VandeHei said he remains optimistic about the outlook for the digital media sector despite the turmoil hitting the industry. He pointed to business-focused outlets like The Information and Morning Brew that have cultivated loyal readers in a tough market. “The lesson of the digital age: Chase fads, fantasy and clicks, fade or starve,” said Mr. VandeHei. “Chase a loyal audience with quality information, you can flourish.”
