Limelight Networks jumps on report to acquire Yahoo's Edgecast for $300M in an all-stock deal
Mar. 07, 2022 7:42 AM ETEdgio, Inc. (EGIO)By: Meghavi Singh, SA News Editor4 Comments
- Limelight Networks (NASDAQ:LLNW) is rising 6.7% premarket after the firm agrees to acquire Yahoo's Edgecast, a leading provider of edge security, content delivery and video services, in an all-stock transaction.
- Yahoo to receive all stock and will invest $30M or about 1x 2021 revenue demonstrating conviction in combined company's growth plans.
- Edgecast is a business unit of Yahoo, which is owned by funds managed by affiliates of Apollo and Verizon Communications.
- Yahoo will receive ~72.2M shares of Limelight common stock and will own ~31.9% of the combined company at closing and appoint three directors.
- The purchase price also includes a $30M investment in the combined company by Apollo and their co-investors, through their ownership of Yahoo.
- Additionally, Yahoo shall receive up to an additional 12.7M shares of Limelight, representing up to an additional $100M in deal consideration, over the period ending on the third anniversary of the closing of the transaction, subject to the achievement of certain share-price targets.
- Upon closure of deal, current Limelight stockholders will own ~68.1% of the combined company, while Yahoo will own ~31.9%.
- The combined company expects meaningful run-rate cost synergy opportunities of ~$50M.
- The strategic spinoff delivers enormous value and opportunity for Yahoo as Edgio scales globally.
- The deal is expected to close in the second half of 2022.
- The company to host conference call today at 8 a.m. ET.