- Akamai Technologies, Inc. (NASDAQ: AKAM) announced it is buying Linode for $900 million. This is why.
Akamai Technologies, Inc. (NASDAQ: AKAM) announced it has entered into a definitive agreement to acquire Linode, one of the easiest-to-use and most trusted infrastructure-as-a-service (IaaS) platform providers. Modern digital experiences – including virtual environments like the metaverse – are created through the convergence of media, entertainment, technology, e-commerce, financial services, and online games.
Akamai has been a key partner to the world’s leaders in these industries for decades by powering and protecting applications in today’s multi-cloud, multi-platform world. With Linode – which has made it simple, affordable, and accessible for developers to consume cloud computing – Akamai will become the world’s most distributed compute platform, from cloud to edge.
Under the terms of the agreement, Akamai has agreed to acquire all of the outstanding equity of Linode Limited Liability Company for approximately $900 million, after customary purchase price adjustments. And as a result of structuring the transaction as an asset purchase, Akamai expects to achieve cash income tax savings over the next 15 years that have an estimated net present value of approximately $120 million. The transaction is expected to close in the first quarter of 2022 and is subject to customary closing conditions.
For the fiscal year 2022, the acquisition of Linode is anticipated to add approximately $100 million in revenue and be slightly accretive to non-GAAP EPS by approximately $0.05 to $0.06.
KEY QUOTES:
“The opportunity to combine Linode’s developer-friendly cloud computing capabilities with Akamai’s market-leading edge platform and security services is transformational for Akamai. Akamai has been a pioneer in the edge computing business for over 20 years, and today we are excited to begin a new chapter in our evolution by creating a unique cloud platform to build, run and secure applications from the cloud to the edge. This a big win for developers who will now be able to build the next generation of applications on a platform that delivers unprecedented scale, reach, performance, reliability and security.”
— Dr. Tom Leighton, chief executive officer and co-founder, Akamai Technologies
“We started Linode 19 years ago to make the power of the cloud easier and more accessible. Along the way, we built a cloud computing platform trusted by developers and businesses around the world. Today, those customers face new challenges as cloud services become all-encompassing, including compute, storage, security and delivery from core to edge. Solving those challenges requires tremendous integration and scale which Akamai and Linode plan to bring together under one roof. This marks an exciting new chapter for Linode and a major step forward for our current and future customers.”
— Christopher Aker, founder and chief executive officer, Linode
