KKR, Axel Springer near deal to break up the company
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Private equity firm KKR and German billionaire Mathias Döpfner are close to striking a deal that would separate Axel Springer's classifieds business from its media properties, a source confirmed to Axios.
Why it matters: An agreement would see KKR exit a media business it once heavily funded and allow Döpfner to pursue more media acquisitions.
By the numbers: KKR took Axel Springer private in a 2019 deal valuing the company at €6.7 billion. KKR and CPPIB, Canada's largest pension fund, own a 48.5% stake in the company
- A deal would give KKR and CPPIB control over Axel Springer's classifieds business, which includes jobs platform StepStone and real estate advertising unit Aviv.
- That business alone is valued at more than €10 billion, per the FT.
Zoom in: Döpfner and Friede Springer, the widow of the company's founder who currently serves as vice-chair, would control Axel Springer's U.S. and European media properties, including Politico, Business Insider and German outlets Bild and Die Welt.
- Döpfner would serve as CEO of the new company, the source said.
- Döpfner and Springer are expected to keep a minority stake in the classifieds division, the source confirmed.
- The agreement would value the whole company at €13.5 billion, per the FT, which was the first to report about the deal. Axel Springer and KKR declined to comment.
Catch up quick: For the past few years, Döpfner has pushed to modernize and digitize Axel Springer's legacy media brands, while expanding its investment in U.S. digital outlets.
- Axel Springer purchased Politico in a deal valued at roughly $1 billion in 2021. It acquired a majority stake in Morning Brew in 2020. The deal valued the millennial newsletter startup at $75 million.
- Prior to going private, the company acquired Business Insider for about $450 million in 2015. It also invested more than $20 million into Ozy Media, a now-defunct digital website, in 2014.
The big picture: The deal could free up Döpfner to pursue more media acquisitions as he looks to grow Axel Springer's U.S. footprint and increase its investments in artificial intelligence.
- Axel Springer recently invested in two AI media startups, Particle and ProRata.ai.
- Döpfner and Axel Springer established a U.S. headquarters in Manhattan last year and hired a U.S. executive leadership team.
Reality check: In divesting its stake in Axel Springer's news business, KKR separates itself from a very public and controversial industry.
- Axel Springer faced a sexual harassment scandal in Germany in 2022 and was caught in a messy spat with editorial leaders at Business Insider over an editorial investigation of the wife of billionaire Bill Ackman.
What's next: The two sides are expected to discuss the deal this week, the source says.
