The combined company, which is expected to be a globally scaled, edge enabled software solutions provider, will operate as Edgio
Yahoo to sell Edgecast to Limelight Networks in an all-stock deal. (Credit: Coolcaesar/Wikimedia Commons)
Limelight Networks has agreed to acquire Edgecast (formerly Verizon Digital Media Services), a provider of edge security, content delivery, and video services, from Yahoo in an all-stock deal worth around $300m.
Based in Arizona, Limelight Networks is a publicly-listed firm that provides edge enabled web applications and content delivery solutions.
Its combination with Edgecast is expected to create a software solutions provider that is globally scaled and edge enabled. The combined firm’s 2021 revenue comes to over $500m made from cloud security and web applications, edge video, and content delivery platform.
Edgecast’s revenue in 2021 was $285m, of which nearly 97% was recurring revenue.
Taking the deal into account, Limelight Networks will rebrand as Edgio, which will be the name of the combined company after the closing.
Edgio is expected to have a global network capacity of over 200Tbps and more than 300PoPs coupled with cloud security, web applications, and edge video platform that are natively integrated.
Limelight Networks CEO Bob Lyons said: “By uniting Limelight and Edgecast, we are building a powerful application, content and video edge enabled solutions company that delivers improved customer performance, productivity and security for the outcome buyer.
“Together we have a strong value proposition to serve the fast-growing, yet fragmented edge solutions market and our combined capabilities will accelerate our ability to capture more share of this high growth $40 billion total TAM.”
As per the terms of the deal, Yahoo, which is owned by funds managed by affiliates of Apollo and Verizon Communications, will get nearly 72.2 million shares of Limelight Networks. This translates to a stake of 31.9% for Yahoo in the combined company post-acquisition.
The consideration is inclusive of an investment of $30m in Edgio by Apollo and its co-investors via their ownership of Yahoo.
Besides, Yahoo can also get an additional 12.7 million shares of Limelight Networks, worth around $100m, during the period ending on the third anniversary of the closing of the deal.
The acquisition of the additional shares, which will increase Yahoo’s stake in the combined firm to 35.5%, will be conditional on the meeting of certain share-price targets.
Yahoo CEO Jim Lanzone said: “At Yahoo, we are focused on driving value creation for our business and customers.
“By spinning off Edgecast to merge with Limelight, the new company will immediately become the leader in the massive and growing edge solutions market. I am confident in the value and strength of this combined company, and the growth it will drive for Yahoo, Edgio and Apollo.”
The deal, which is subject to regulatory approvals and other customary closing conditions, is currently anticipated to close in the latter half of this year.