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Wednesday, September 30, 2015

Axel Springer Buys Business Insider For $443 Million, Paying 9x Projected Revenues

In the latest sign easy-money market froth may be peaking, moments ago German media conglomerate Axel Springer announced it has agreed to buy 88% of web-only Business Insider, adding to the 9% it already owns, for $343 million, which according to the Springer press release values 100% of the content aggregator at $442 million "on the basis of a cash and debt free valuation of USD 390 million." The remaining 3% of the company will be retained by Bezos Expeditions, the personal investment company of Jeff Bezos, who purchased a $5 million stake in 2013.

The transaction means that Business Insider, which was founded in 2007 in by Henry Blodget (who had previously spent several years as a freelance writer and consultant), Kevin Ryan and Dwight Merriman, is valued about 77% higher than Washington Post which was acquired by Jeff Bezos in 2013 for $250 million, and 40% higher than the previous record paid for an all-digital media outlet, when AOL acquired Huffington Post for $315 million in 2011. According to Springer, founder Henry Blodget and COO Julie Hansen will stay on board and "remain significantly invested through an extensive, long-term equity incentive."


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