Sunday, December 8, 2013
6:28 PMVerizon reportedly buying CDN owner EdgeCast for $350M+
- TechCrunch reports Verizon (VZ) is acquiring content delivery network (CDN) EdgeCast for $350M+. EdgeCast counts Yahoo, Twitter, Pinterest, and Hulu among its clients, has been profitable for the last four years, and was on a $100M/year revenue run rate as of July.
- Thus, assuming EdgeCast is still growing, Verizon may be paying just ~3x forward sales. CDN market leader Akamai (AKAM) trades at 4.5x 2014E sales.
- Acquiring EdgeCast could unravel an enterprise CDN partnership Verizon has with Akamai. With telcos increasingly looking to offer their own CDN services, Akamai has been trying to turn a threat into an opportunity by offering carrier CDN solutions. In addition to Verizon, AT&T and Orange are clients.
- As for Verizon, the company could leverage its IP infrastructure and sales reach to grow EdgeCast's sales to third-parties, and (perhaps more interestingly) use EdgeCast's network to underpin an expansion of its online/mobile video offerings.
- This year has already seen Verizon add mobile support for certain FiOS channels, and acquire TV Everywhere encoding tech provider upLynk. The telco has also been reported to be eying the assets of Intel's Web TV unit, with the idea of offering a Web TV service in areas not covered by FiOS.
5:25 AMSupreme Court justice blocks last-ditch try to stop AMR-US deal
- The merger of American Airlines (AAMRQ) and US Airways (LCC) is all set to take off tomorrow after Supreme Court Justice Ruth Bader Ginsburg denied a last-minute effort by consumer groups and travel agents to prevent the deal from taking place.
- The plaintiffs fear that the deal will force prices up, hurt services and make planes more crowded.
5:02 AMBain, Golden Gate enter battle for Compuware
- Bain and Golden Gate Capital have reportedly teamed up to make a bid for software provider Compuware (CPWR), whose market cap is $2.34B.
- The private-equity firms agreed to acquire larger rival BMC Software (BMC) in May, although they wouldn't necessarily merge Compuware with BMC.
- Bain and Golden Gate could face competition from Thoma Bravo and Vista Capital.
- Any deal could represent an exit for activist investor Elliot Management, Compuware's largest shareholder with an 8.6% holding. Elliot tried to buy Compuware a year ago but was rebuffed.