Edgio has announced the successful completion of Limelight’s acquisition of Yahoo’s Edgecast. The combined company will operate as Edgio, delivering significantly increased scale and scope with diversified revenue across products, clients, geographies and channels, and an expanded total addressable market of $40 billion.
Edgio solutions combine the power of the world's best performing edge platform with the most complete set of capabilities for web applications, APIs and video content – continuing on its strategy to improve profitability and growth.
“In a world where digital workloads and their consumers are increasingly distributed, the ability for companies to deliver exceptional digital experiences requires them to more productively build faster and safer solutions for their customers at the edge. Today marks a meaningful step in our ability to address this need. Edgio now boasts the most complete edge-native web application and API solution, best-in-class streaming and delivery capabilities – all running on the world's most performant globally-scaled edge network. These unique capabilities create a robust platform for growth and profitability,” said Bob Lyons, CEO of Edgio.
Edgio’s global edge platform delivers a capacity of more than 200 Tbps, more than 300 global PoPs and more than 7,000 ISP connections. Powered by this foundation, Edgio AppOps securely delivers the fastest web applications and APIs on the planet, while also being the most complete solution with natively integrated developer tools, multi-layered security and network. Edgio Delivery and Edgio Streaming offer the most comprehensive set of solutions for the OTT industry from workflow management, processing, analytics, and live event support and delivery, offering unparalleled options for the outcome buyer.
Building on this platform, Edgio will immediately improve its revenue profile to include a balance of both usage-based and SaaS-like margin profiles. The expansion of cross- and up-sell opportunities coupled with increased channel capabilities support planned growth improvements. On a pro-forma basis, the largest client will be approximately 13% of revenue, with no other client exceeding 10%. Edgio will continue building growth and profitability momentum in the near term toward its longer term strategic target of a balanced rule-of-40 performance.
Edgio’s board of directors will be reshaped to better align with the needs of a growth-oriented, profitable and globally-scaled technology company. The addition of Reed Rayman and E-Fei Wang from Apollo signal their strong belief in Edgio’s future and provide tremendous strategic and operational expertise. In addition, Edgio welcomes Dianne Ledingham, a seasoned technology executive and strategy leader to the board. Dianne has more than 30 years of experience helping companies unlock enterprise value as an Advisory Partner in Bain's Customer Strategy & Marketing Practice, and Bain's Telecommunications, Media and Technology (TMT) practices.
“We will continue building a board and management team with the technology, operations and strategy skills required to support the company we are quickly becoming. Our board and management is committed to the belief that our ability to deliver high performance and innovation benefits from bringing together diversified perspectives and experiences,” said Bob Lyons, CEO of Edgio.
Transaction Details at Close
In connection with the sale, Yahoo received approximately 80.8 million shares of Limelight common stock, valuing Edgecast at approximately $300 million based on the 30-day trailing VWAP of approximately $4.12. The purchase price included a $30 million cash investment into Edgio by Apollo and its co-investors, through their ownership of Yahoo as well as preliminary net working capital adjustments, which includes the prepayment of certain expenses by Yahoo.
Goldman Sachs & Co. LLC served as financial advisor to Edgio, and Goodwin Procter LLP served as legal counsel. Evercore and RBC Capital Markets, LLC served as financial advisors to Edgecast and the Apollo Funds, and Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel.
