German media giant Axel Springer has announced it’s acquiring online business news publication Business Insider, spending some $343 million to acquire 88 per cent of BI’s shares. Axel Springer already had a stake of around nine per cent in the business.
The acquisition will be financed by Axel Springer’s existing credit lines, and is subject to regulatory approval.
Post acquisition Axel Springer will own around 97 per cent, with Amazon founder Jeff Bezos owning the remaining shares, vis his Bezos Expeditions personal investment company. Early investors in BI include Marc Andreessen and Ken Lerer. The latter will receive a seat on the BI board.
The purchase price amounts to $442 million for 100 per cent of the business, or a cash and debt free valuation of $390 million, Axel Springer said today. The price-tag perhaps reflects the audience focus for BI, which targets the sought after millennial demographic. In addition to ad-funded business news, it has a paid subscription-based research and information service called BI Intelligence. (For some comparative context, AOL shelled out $315 million back in 2011 to acquire The Huffington Post.)
This summer, Axel Springer was reported to be in talks with Pearson to buy the Financial Times. In the event that publication sold to Japan’s Nikkei for $1.3 billion — giving Axel Springer more of an incentive to close the deal on BI.
That said, the FT and BI couldn’t be more different, tonally speaking, with the latter replete with the kind of listicles, click-friendly buzzwords and photo-heavy page design that is also deployed by youth-focused digital media properties such as BuzzFeed and Mashable. While the FT remains a broadsheet newspaper in style and substance. And its subscription-based online business model is also targeted at core financial workers, whereas younger rivals like BI package business news in an entertainment wrapper to appeal to a broader audience.
Business Insider was launched back in 2007 (as Silicon Valley Insider), before rebranding to BI in 2009. Axel Springer said BI’s founder, CEO and editor-in-chief Henry Blodget will remain in post, along with COO and president Julie Hansen. It added that the pair will “remain significantly invested in Business Insider through an extensive, long-term equity incentive”.
BI currently employs more than 325 people, around half of whom are journalists. In addition to U.S. news sites it has launched local editions or licenses in seven other countries with more editions planned. A German edition is slated for Q4 this year, and will be operated by Axel Springer company finanzen.net.
Commenting on the acquisition in a statement, Mathias Döpfner, CEO of Axel Springer SE, said the deal was aimed at expanding the company’s digital reach, and continuing its strategy of investing in digital journalism in English-speaking regions.
“Henry Blodget’s way of digital storytelling reaches tomorrow’s decision-makers. Combining our forces will allow us to unlock growth potential and expand Business Insider’s portfolio to new verticals, new locations and new digital content,” he added.