A few months ago, German publishing house Axel Springer narrowly failed in its attempt to buy the Financial Times, the august pink-sheeted UK newspaper that dates back to 1888. Instead, it is splashing out a huge sum to buy one of financial journalism’s newer players: Business Insider, the quick-fire business news site founded by former stock analyst Henry Blodget in 2009.
The move comes as legacy print publishers and broadcasters continue to court digital-first media companies, including previous investments by Springer into upstart news sites Mic and Ozy. NBC Universal invested $200 million each in media darlings Vox Media and BuzzFeed last month, which both boast industry-leading levels of social traffic and reader engagement. After the deal, Vox and BuzzFeed are estimated to be worth more than $1 billion and $1.5 billion, respectively:
Springer, which already owned 9% of BI, will buy an additional 88% of the media company for $343 million, bringing its total ownership to 97%. The remainder of the company, now valued at $442 million, is held by Amazon founder Jeff Bezos.
BI’s click-magnet headlines and slideshows stand in stark contrast to the somber FT, which was sold to the Japanese publisher Nikkei last month for $1.3 billion. Although Springer is paying less overall to buy BI, the premium to revenue—nine times, according to Re/code—far outpaces what Nikkei paid for the FT. The revenue multiple also puts the price paid for long established outlets like The Economist and the Washington Post in the shade:
The purchase is a big win for Blodget, who received a lifetime ban from the securities industry after settling civil fraud charges with US regulators in 2003 in the wake of the dotcom bust. On the conference call following today’s deal, Blodget called working with Springer a “great, multi-decade project.” He added: “Our hope is that we will be around for a very long time.”