- Site founded by Henry Blodget lets publisher expand globally
- Amazon.com founder Jeff Bezos to retain minority stake
German media company Axel Springer SE agreed to take over Business Insider Inc. in a $343 million deal, accelerating its push into English-language news after losing out a bidding contest for the Financial Times two months ago.
Axel Springer said Tuesday it is purchasing 88 percent of the news site, boosting its stake to about 97 percent. Amazon.com Inc. founder Jeff Bezos will own the remaining 3 percent of the New York-based site, which has 76 million monthly unique visitors.
Business Insider, founded by former Wall Street analyst Henry Blodget, vaults Berlin-based Axel Springer into a major provider of English-language business news while also sharpening its focus on digital operations. In July, the publisher lost out in a bid for the Financial Times to Nikkei Inc., which is paying $1.3 billion to acquire the British newspaper from Pearson Plc.
“It really is a pivotal point in the changing of the media landscape,” Axel Springer Chief Executive Officer Mathias Doepfner said on a call after the announcement. “New digital media companies are being built and we definitely want to be a player. With Business Insider we have laid the foundation to achieve that.”
The company paid the equivalent of six times Business Insider’s projected revenue for 2016, Axel Springer Chief Financial Officer Julian Deutz said on the call. Deals for Internet content, news and entertainment companies announced in the last two years have commanded a median multiple of 2.5 times revenue, according to data compiled by Bloomberg.
Business Insider, co-founded in 2007 by current CEO Blodget as a Web-only publication, now has seven additional editions outside the U.S., including in the U.K, Australia and Singapore. In July, it introduced a new tech-focused standalone website called Tech Insider.
Blodget, also the site’s editor-in-chief, and Chief Operating Officer Julie Hansen will stay in their roles. Business Insider employs more than 325 people, about half of them journalists.
Under Doepfner, Axel Springer has been increasingly investing in online operations. Europe’s biggest newspaper publisher formed a partnership that launched the European version of Politico.com, a Washington-based political website, and last year it invested in Silicon Valley-based Web magazine Ozy. In 2014, it also acquired a 20 percent stake in French search engine Qwant and in 2013 it launched the paid-for online version of Bild, Germany’s largest newspaper.
Doepfner will use Business Insider as a launchpad for expansion beyond Europe. Axel Springer’s first priority will be to expand the website’s reach and audience, followed by increasing revenue and finally, profit, he said.
In January, Axel Springer led a group of investors that paid $25 million for a stake in Business Insider. Bezos, who owns the Washington Post, led a group of investors who bought a $5 million stake in Business Insider 2013.
The Business Insider acquisition is subject to approval by antitrust authorities.