Limelight Networks To Buy Yahoo's Edgecast In $300 Mln All-stock Deal

Limelight Networks, Inc. (LLNW) announced Monday that it has entered into a definitive agreement to acquire Yahoo's Edgecast, Inc., a provider of edge security, content delivery and video services, in an all-stock transaction that values Edgecast at approximately $300 million.

Edgecast is a business unit of Yahoo, which is owned by funds managed by affiliates of Apollo (APO) and Verizon Communications (VZ).

Yahoo will receive approximately 72.2 million shares of Limelight common stock, subject to customary closing adjustments, and will own approximately 31.9% of the combined company at closing, while current Limelight stockholders will own approximately 68.1% of the combined company.

The combination will create a globally scaled, edge enabled software solutions provider with pro forma 2021 revenue of more than $500 million across cloud security and web applications, content delivery and edge video platform.

In anticipation of the transaction, Limelight will rebrand as Edgio, with the combined company continuing to operate as Edgio following close. Bob Lyons will continue to lead Edgio as CEO.

The combined company expects annual run-rate cost synergies of $50 million including approximately $30 million to 35 million from reduced colocation and internet peering expense, and approximately $15 million to 20 million of operating expense savings.

The purchase price also includes a $30 million investment in the combined company by Apollo and their co-investors, through their ownership of Yahoo. Yahoo can also receive up to an additional 12.7 million shares of Limelight, representing up to an additional $100 million 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

The transaction, which has been unanimously approved by the Board of Directors of both companies, is currently expected to close in the second half of 2022, subject to receipt of regulatory approvals and the satisfaction of other customary closing conditions.

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