Akamai Technologies, Inc., a leader in cybersecurity and cloud computing, has secured approval from the U.S. Bankruptcy Court for the District of Delaware to acquire select assets from Edgio, a company currently undergoing Chapter 11 bankruptcy proceedings. This acquisition includes certain customer contracts from Edgio’s content delivery and security businesses, along with non-exclusive rights to patents within Edgio’s portfolio. However, the deal notably excludes Edgio’s personnel, technology, and network-related assets, reflecting a targeted approach by Akamai to enhance its customer base and service capabilities.
The court’s approval follows Akamai’s successful bid during Edgio’s 363 bankruptcy auction on November 13, 2024. This transaction is strategically significant for Akamai, as it brings several hundred new customers into its ecosystem, providing them with a seamless transition to Akamai’s robust content delivery and security services. With Edgio’s network operations slated to wind down by mid-January 2025, these customers will gain immediate access to Akamai’s extensive cybersecurity and cloud computing portfolio. Akamai’s Chief Operating Officer, Adam Karon, emphasized the company’s readiness to facilitate a smooth migration, leveraging its extensive experience in integrating similar transactions to ensure minimal disruption for customers.
Financially, the acquisition is expected to generate significant revenue growth for Akamai, with an estimated $9-$11 million boost in Q4 2024 and an anticipated $80-$100 million for the full year 2025. Despite initial transition service costs of $15-$17 million in the fourth quarter, Akamai projects the deal will positively impact non-GAAP net income per diluted share by $0.15-$0.20 in 2025. Ed McGowan, Akamai’s CFO, highlighted the deal’s long-term value, noting that the integration of Edgio’s customer base onto Akamai’s cost-efficient platform is expected to enhance profitability and create opportunities for cross-selling and up-selling advanced solutions.
This strategic acquisition aligns with Akamai’s vision of reinforcing its position as a global leader in cybersecurity and cloud services. The transaction is anticipated to close in early December 2024, pending customary closing conditions, setting the stage for a strengthened market presence and expanded customer engagement for Akamai in the years ahead
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