What: German media company Axel Springer will acquire Business Insider in a US $343 million deal. The deal that values the publisher at US $390 million.
Why it matters: The viability and investment proposition of major online media destinations is often up to debate, but this deal values an online publisher at a relatively high amount of money. Springer is tempted by the potential of subscription revenues at Business Insiders and, more importantly, by Business Insider’s substantial Millennial audience. (Only last week Hearst, with a similar rationale, bought a stake in Complex Media. )
According to Axel Springer sources, the deal was made for strategic reasons. Strategic in the sense that the deal will allow Axel Springer to branch out globally, add English-language offerings and get a better foothold in digital. It also makes it the world’s sixth-largest publisher in terms of reach.
Business Insider’s acquisition is only the latest in a series of investments and acquisitions of digital pure plays by larger media companies. NBC Universal made a US$200 million investment in Vox and a US$200 million bet on BuzzFeed, A&E Networks bought a US$250 million stake in Vice. Elite Daily was sold for US$50 million to the Daily Mail earlier this year, and Scripps Networks Interactive led a US$50 million investment in Refinery29.
Business Insider has seven different editions of the website: one in the US, one in the UK and five in Asia. Axel Springer will add a German edition in Q4 of this year.