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

Tyler Durden's picture




 

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."

As a reminder, one month ago Springer lost the auction to acquire the Financial Times which was ultimately sold to Japan's Nikkei for $1.3 billion.

According to the Springer press release, for $400 million the German media outlet is getting some 325 employees, most of whom recent journalism school graduates, as well as 76 million unique monthly visitors which "will increase Axel Springer’s worldwide digital audience by two-thirds to approximately 200 million users, making the company one of the world’s six largest digital publishers in terms of reach."

More importantly, according to Re/Code, Springer's failure to clinch the FT, prompted the scramble to buy Business Insider which values the company at around 9x its projected revenues for this year. Re/Code adds that "another complimentary theory popular with media executives I’ve talked to in the last week: Springer wanted a digital asset, and even at a rich price, Business Insider was more affordable than publishers like BuzzFeed and Vox Media."

The bigger problem for Springer is if it hopes to generate profits on its acquisition: Business Insider has historically been just about breakeven, report a modest profit several years ago, then spending all of its revenues and then some to double down on investments: in addition to its US website, the company launched 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.

In any event, the long-awaited media consolidated/roll up phase has officially started with two marquee financial purchases in just the past two months. What is ironic, is that just like in 2007 when Japanese and Europen investors were bidding up US RMBS, with disastrous results, this time they are buying up the financial media. To be sure, the entire cadre of financial reporters will be carefully following this transaction, many with hopes they too can cash out before the buying window closes.

 

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Tue, 09/29/2015 - 08:24 | 6605875 Infinite QE
Infinite QE's picture

Top indicator.

Tue, 09/29/2015 - 08:25 | 6605879 Stroke
Stroke's picture

Friend of the left

Tue, 09/29/2015 - 08:30 | 6605891 Money Counterfeiter
Money Counterfeiter's picture

When you can print money is not the problem.  The problem is gettin the peasants to buy into the propaganda.

Tue, 09/29/2015 - 11:54 | 6606528 OrangeJews
OrangeJews's picture

Looks like Henry more than got his money back from the government.

 

 

Tue, 09/29/2015 - 11:34 | 6606448 junction
junction's picture

I don't believe it.  Axel Springer may have promised Blodgett and company $443 million, but only after certain milestones are met by this crappy online magazine. This deal looks similar to the Bertelsman purchase of "Fast Company" magazine in 2000, a five year old magazine then that fetched a $350 million pricetag.  Bertelsman sold the magazine for $35 million in 2005.  Whoever approved this purchase of "Business Insider" at Axel Springer must be on drugs.

Tue, 09/29/2015 - 08:24 | 6605876 freedogger
freedogger's picture

What a piece of garbage click bait that thing is.

Tue, 09/29/2015 - 09:15 | 6605995 Viffer
Tue, 09/29/2015 - 09:23 | 6606019 Son of Loki
Son of Loki's picture

Thank God for Ad Block!

Tue, 09/29/2015 - 08:28 | 6605885 Stanley Lord
Stanley Lord's picture

Business Insider is a joke, it is written by five year olds.

Tue, 09/29/2015 - 08:33 | 6605898 ShorTed
ShorTed's picture

...for 5 year olds.

Tue, 09/29/2015 - 08:38 | 6605906 AlaricBalth
AlaricBalth's picture

Business Insider- The business persons People Magazine.

"Where I work we have only one editorial rule: you can't write anything longer than the average person can read during the average crap."

Tue, 09/29/2015 - 09:28 | 6606033 Son of Loki
Son of Loki's picture

They'll go after the Daily Mail Online next:

 

Victoria Beckham reveals fading tattoo tribute to husband David as the couple attend charity events on different continents

 

http://www.dailymail.co.uk/tvshowbiz/article-3252382/Victoria-Beckham-lo...

 

Top notch, thorough news reporting!

Tue, 09/29/2015 - 11:59 | 6606544 OrangeJews
OrangeJews's picture

Could use some more pictures though.

Tue, 09/29/2015 - 09:29 | 6606037 YHC-FTSE
YHC-FTSE's picture

I went to their site once a few years ago. I genuinely thought it was an Indian outfit whose articles were churned out by moonlighting call centre blokes who used English as a foreign language. It was that badly written and mostly plagiarized.

Tue, 09/29/2015 - 08:29 | 6605886 Sir SpeaksALot
Sir SpeaksALot's picture

it s not about the projected revenues, it s about the scale of influence on peoples minds.

Tue, 09/29/2015 - 08:32 | 6605888 Nex
Nex's picture

Henry Blodget (who had previously spent several years as a freelance writer and consultant)

------------

Correctly he spent some time in court: dot-com crook.

Tue, 09/29/2015 - 08:34 | 6605900 Id fight Gandhi
Id fight Gandhi's picture

Its all click bait shit too, riddled with errors because they use interns without editors to write their shit.

Most content isn't even theirs its linked.

Tue, 09/29/2015 - 08:36 | 6605897 29.5 hours
29.5 hours's picture

.
.
.
Yes, acquisition of this bottom-feeder is a market top indicator.

Now I need to click on this link that shows scientifically how to make myself more attractive to the opposite sex--whichever sex that might be...

Tue, 09/29/2015 - 08:41 | 6605912 viator
viator's picture

That's a lot of money for a Democrat Party mouthpiece.

Tue, 09/29/2015 - 08:46 | 6605928 knukles
knukles's picture

Ain't that amazing, the money behind the scenes that the Dimowits have but we never hear about unlike the Koch Brothers, etc.

Tue, 09/29/2015 - 08:45 | 6605926 knukles
knukles's picture

Gosh, that seems a but expensive, but what do I know?
It's like when Ford bought Jaguar for $2.5 billion in 1989.  Just seemed a tad (vast understatement) over the top. And if that was a tad over the top, then .....

Tue, 09/29/2015 - 08:52 | 6605940 drivenZ
drivenZ's picture

I'll know its the top when ZH sells for $90mm

Tue, 09/29/2015 - 09:01 | 6605959 knukles
knukles's picture

Bloomberg will buy it to better meet the demands of the non-lobotomized from the Island of Misfits and then turn it into a propagandized mush messaging machine.
Would you like a curry Slurpee with your entertainment?

Tue, 09/29/2015 - 08:54 | 6605945 Praeda2
Praeda2's picture

Friday humor is early this week. What a joke... hahaha ugh. What was the latest garbage I unfortunately saw them doing... was something to do with sports. It's just a pointless, directionless rag.

Tue, 09/29/2015 - 08:55 | 6605946 djsmps
djsmps's picture

$343 million for a joke? I don't get it.

Tue, 09/29/2015 - 09:17 | 6606004 Viffer
Tue, 09/29/2015 - 09:00 | 6605956 Grandad Grumps
Grandad Grumps's picture

Just another inside job. These arranged marriages are designed to transfer wealth in a circle jerk of parasitism, hopefully with no one being the wiser.

There is no value add here. This is not the economy you were looking for.

Tue, 09/29/2015 - 09:07 | 6605979 Panic Mode
Panic Mode's picture

I wonder when Zerohedge will be bought for stupid amount of fiat cash.

Tue, 09/29/2015 - 09:17 | 6606006 falak pema
falak pema's picture

Springer springs from VW to Business BS...some awesome jump with fiat at the Hopalong Olympics!

Tue, 09/29/2015 - 09:26 | 6606027 Bloodstock
Bloodstock's picture

Hahahahahahahahahahahaha! Daaammm the stupidity of some people is unbelievable at times! I am LMFAO!

Tue, 09/29/2015 - 09:56 | 6606127 azengrcat
azengrcat's picture

Time for business insider headline contest:

-Huge unbelievable news, old media admits it's days are numbered

-New media acquisition frenzy

-5 things about new media that will blow your mind

-This new media company just got a ginormous valuation

Tue, 09/29/2015 - 09:59 | 6606136 aztrader
aztrader's picture

Will be interesting to see how much further left the articles go.   They spend a lot of their time publishing phony economic numbers, phony earnings growth and completely ignore the crimes of the left.    When was the last time they released any truth about Obama, Hitlery or immigration.

Why would anyone pay this kind of money for a website in this economy?  Payback for someone?  A new source of propaganda for the global elites?  Absolutely crazy....

 

Tue, 09/29/2015 - 10:21 | 6606200 fiftybagger
fiftybagger's picture

The bought and paid for mainstream media has now morphed into the bought and paid for alternative media.  Carry on.

Silver For The People

Tue, 09/29/2015 - 13:27 | 6606955 libertysghost
libertysghost's picture

I'm stealing your line...that OK?  

Tue, 09/29/2015 - 13:25 | 6606951 libertysghost
libertysghost's picture

I somehow got lured there last night...worst piece of propaganda I've seen in a long time...from a "journalistic standpoint".  Here's my comment there:

 

LibertysGhost  on Sep 28, 8:39 PM said:

Natasha Bertrand and Michael B Kelley...you should be ashamed for both intentionally misleading Americans and claiming such poorly written work qualifies as "journalism". 
It really took two people to write such a bad article? I guess they were trying double hard to look like they did research. The sources cited were the standard crew that have led the "west" into bad foreign policy for decades...the Brookings institute?....really? Looking at the author's bios it appears Bertrand (one author) worked for one of the organizations she cites...unless her bio plagiarizes parts of the "who we are" description for FRIDE for no apparent reason. But this incestuous relationship bleeds throughout this article. You see, they cited a quote FRIDE gave to the Carnegie Foundation, while earlier quoting the neoliberal mouthpiece David Rothkopf (who is 100% BS-shill) as from the Foreign Policy Group...well looking at the FPG profile for him you find he also sits on the Carnegie Foundation advisory panel. Hmmm? You can find that systematic deception throughout this article. 
But how does this article read? It reads "desperate"...desperation is shown when you throw so many theories against a wall at once hoping something will stick. By their logic, if Assad fought anyone he was helping ISIS...because "many experts agree that giving in to Assad's continued reign would only make the situation worse." Of course, "many experts wouldn't agree also" but we won't mention that. Pat Buchanan, for instance, would be an "expert"...and he says the opposite. Actually, the lists of experts that think now that the US in funding and training al Nusra (an al quaeda branch) and some apparently imaginary Free Syrian Army (which these same experts the article relies on have supported throughout) has directly fueled ISIS...and they don't need some "by extension to death" argument to show it. We train them, fund them...and then they leave for ISIS. That's pretty direct. The US govt did this to us Americans by lying to us and now that their lies are being exposed by their own hypocrisy and people like these writers and the "experts" they quote are trying to con us all that if we just give them more time (apparently a couple/few decades of disaster isn't enough...they want more Saudi/Qatari blood money) their grand plan will finally work.
Tue, 09/29/2015 - 11:15 | 6606380 PTR
PTR's picture

BI used to be alternative media in it's early days.

Then it started going into huffpo mode and I haven't read it since.

Tue, 09/29/2015 - 11:17 | 6606389 Catullus
Catullus's picture

The new new money laundering: media and social media valuations.

Tue, 09/29/2015 - 11:46 | 6606491 kingvaclav
kingvaclav's picture

Business Insider:  PoS

Do NOT follow this link or you will be banned from the site!