CDN service provider Limelight Networks has agreed a deal with Yahoo to acquire Edgecast in an all-stock transaction.
The deal, it said, would create a global leader in edge enabled software solutions.
The combined company will operate under the banner of Edgio, and values Edgecast at approximately US$300 million.
Yahoo, which itself is owned by funds managed by affiliates of Apollo and Verizon Communications, will own 31.9% of the new company and appoint three directors to the board.
Edgie will be led by Limelight CEO Bob Lyons, while the board will be “more closely aligned to Edgio’s go-forward strategy and work closely with Mr. Lyons and the Edgio management team to leverage their combined skills and experience to enhance shareholder value”.
Limelight said that Edgio will “be a leading solutions provider of choice for outcome-oriented businesses and clients looking to deliver a fast, secure and frictionless digital experience to end-users”.
Commenting on the deal, 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 US$40 billion total TAM. In six short months we have taken our TAM from US$12 billion to US$40 billion and with the acquisition of Edgecast, we are further accelerating and solidifying our ability to be recogniaed as a leader in edge software solutions for the outcome buyer.”
Jim Lanzone, CEO of Yahoo, 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.”