Two months after failing to buy the Financial Times, the German publishing group Axel Springer has acquired Business Insider in a deal valuing the US news website at $390m (£260m).
The German publisher of the Die Welt and Bild newspapers is paying £226m for 88 per cent of the shares. The valuation, at around six times Business Insider’s projected revenues for next year, sets a new benchmark for deals involving digital publishers, eclipsing the sale of the Huffington Post to AOL for £208m in 2011.
Axel Springer bid £750m for the FT but lost out to Japan’s largest media company, Nikkei, which made the acquisition for £844m.
Henry Blodget, the founder, chief executive and editor-in-chief of Business Insider, was rumoured to have been looking for a buyer for two years. A former analyst, he agreed to a ban from Wall Street after an investigation into civil fraud allegations by the Securities and Exchange Commission in 2003.
Business Insider targets “millennial” readers, aged 18 to 34, and specialises in content designed to be read via social media channels on mobile devices. The site, which opened a bespoke UK operation last year, claims 76 million readers worldwide and has 325 employees, around half of whom are journalists.
Axel Springer said the deal fitted its strategy of seeking to broaden its global reach, diversify its “English-language offerings” and expand its “commitment to innovative digital journalism”.
Mr Blodget, 49, praised the Germany company as a “forward-thinking team”. He said: “We look forward to working together to build a major global news organisation for the digital century.”
Axel Springer, which already owned 9 per cent of the shares in Business Insider, now holds a 97 per cent stake, with the remainder in the hands of Amazon’s founder Jeff Bezos via his personal investment company Bezos Expeditions.
Before starting Business Insider in 2007, Mr Blodget wrote an influential blog called Silicon Alley Insider. He told The Independent last year that, after being banned from Wall Street, he “very much felt the pain of people who are treated cavalierly in the press” and that he had built his media empire on the basis that business people should be treated fairly.
“There are some people who are bad people, there’s no question about that. But until you have gone through an experience like this, it’s hard to appreciate what it’s like on the other side. Just treat them as people – and be fair,” he said.
Two years ago, after USA Today columnist Michael Wolff suggested Business Insider should sell up for $100m, Mr Blodget responded with a blog in which he admitted that his long-term goal had been to cash out to Rupert Murdoch for just that amount. He noted that in six years Business Insider had grown to become the third-largest digital business news publication, behind only The Wall Street Journal and Forbes.
And he said “we don’t feel any great desire to sell” with a caveat: “Especially for a mere $100m.”
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