Limelight completes acquisition of Edgecast from Yahoo; Combined company takes the name Edgio, creating a global leader in edge solutions


Edgecast, Inc.’s Streaming Applications and Experiences at the Edge, today announced the successful completion of Limelight’s acquisition of Edgecast. The combined company will operate as Edgio, offering significantly increased scale and reach with diversified revenues across products, customers, geographies and channels, and an expanded total addressable market of $40 billion.

Edgio solutions combine the power of the world’s most capable Edge platform with the most comprehensive set of features for web applications, APIs and video content, continuing its strategy of improving profitability and growth. Edgio now delivers approximately 20% of global internet traffic, from instant-loading websites to high-demand content for 20,000 major digital companies such as Amazon, Sony, Kate Spade, Microsoft, Sun TV, Verizon, Disney, TikTok and Twitter .

“In a world where digital workloads and their consumers are increasingly distributed, the ability of enterprises to deliver exceptional digital experiences compels them to more productively build faster and more secure solutions for their customers at the edge. . Today marks an important step in our ability to meet this need. Edgio now offers the most comprehensive native web application and API solution, the best streaming and streaming capabilities, all running on the world’s highest performing edge network. These unique capabilities create a robust platform for growth and profitability,” said Bob Lyons, CEO of Edgio.

Strategic operational scale

Edgio’s global edge platform offers over 200 Tbps capacity, over 300 global PoPs and over 7,000 ISP connections. Powered by this foundation, Edgio AppOps securely delivers the fastest web apps and APIs on the planet, while being the most comprehensive solution with natively integrated developer tools, multi-layered security, and networking. Edgio Delivery and Edgio Streaming offer the most comprehensive set of solutions for the OTT industry of workflow management, processing, analysis and support and delivery of live events, offering unparalleled options for the end buyer.

Growth and profitability

Building on this platform, Edgio will immediately improve its revenue profile to include a balance between usage-based and SaaS-like margin profiles. Expanding cross-selling and up-selling opportunities, coupled with increased channel capabilities, support the expected growth improvements. On a pro forma basis, the largest customer will represent approximately 13% of revenue, with no other customer exceeding 10%.

Profitability will benefit from annual cost synergies in excess of $50 million, including approximately $30-35 million in COG related to colocation and Internet peering expenses, and approximately $15-20 million in cost savings. exploitation. Edgio expects to realize about half of the $50 million in synergies in the first two quarters after closing. Additionally, the $30 million cash investment by Apollo Funds further strengthens the balance sheet to support continued growth initiatives.

Based on these drivers, Edgio will continue to build momentum for near-term growth and profitability towards its longer-term strategic goal of balanced performance under the rule of 40.

“Edgio is a recognized leader in delivering native digital solutions to the edge, and Apollo is very excited to be a part of this shared vision,” said Apollo Partner Reed Rayman, who will join the company’s board of directors. “We believe Edgio can quickly become the go-to partner for cutting-edge native digital solutions for businesses looking to deliver faster, more secure digital experiences to their customers.”

Financial outlook

Management intends to provide a combined financial outlook for calendar year 2022 in conjunction with the release of its second quarter 2022 financial results.

board of directors

Edgio’s Board of Directors will be reshaped to better align with the needs of a growth-oriented, profitable, global technology company. The arrival of Reed Rayman and E-Fei Wang from Apollo demonstrates their strong confidence in Edgio’s future and brings tremendous strategic and operational expertise. In addition, Edgio welcomes Dianne Ledingham, seasoned technology executive and strategic leader to the Board of Directors. Dianne has over 30 years of experience helping companies unlock business value as an advisory partner in Bain’s customer strategy and marketing practice, and telecommunications, media and technology practices ( TMT) by Bain.

“We will continue to build a board and management team with the technology, operational and strategic skills necessary to support the business we are rapidly becoming. Our board and management are confident that our ability to deliver high performance and to innovate benefits from bringing together diverse perspectives and experiences,” said Bob Lyons, CEO of Edgio.

Transaction Details at Closing

As part of the sale, Yahoo received approximately 80.8 million shares of Limelight common stock, valuing Edgecast at approximately $300 million based on a 30-day VWAP of approximately $4.12. The purchase price included a $30 million cash investment in Edgio by Apollo and its co-investors, through their ownership of Yahoo, and preliminary net working capital adjustments, which include the prepayment of certain expenses by Yahoo. Yahoo may also receive up to 12.7 million additional shares of Edgio, representing up to $100 million in additional consideration, over the period ending on the third anniversary of the closing of the transaction, subject to the achievement of share price targets. Edgio shareholders own approximately 66.8% of the combined company, or approximately 63.5% assuming Edgio achieves all share price targets under the contingent consideration agreement, while that Yahoo will own about 33.2% or 36.5%, respectively.


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