Akamai to Acquire Speedera Networks
CAMBRIDGE, MA and SANTA CLARA, CA – March 16, 2005: Akamai Technologies, Inc. (NASDAQ: AKAM) and Speedera Networks Inc. announced today that the two companies have signed a definitive agreement for Akamai to acquire Speedera in a stock-for-stock merger transaction. The closing of the transaction, which is subject to customary closing conditions, including regulatory approvals and the approval of Speedera's stockholders, is expected to occur in the second quarter of 2005. The acquisition is expected to be accretive on a normalized, diluted per share basis* in 2005.
The acquisition of Speedera is expected to enable Akamai to better compete against larger managed services vendors. Akamai and Speedera provide businesses with a cost-effective, distributed platform for accessing Web computing and capacity on demand worldwide without having to make significant upfront investments in infrastructure. The acquisition also will provide customers with a broader suite of services available on the world's largest, high-performance distributed computing platform for the delivery and acceleration of Web content and applications.
As businesses and government agencies strive for a more dynamic and interactive presence on the Web, and as they migrate more business processes online, leading technology analysts have identified that the demand for outsourced content and applications acceleration solutions will continue to expand. To compete online, enterprises must ensure that their customers, suppliers and partners receive a fast, reliable, scalable and secure Web experience.
“The combination of Akamai and Speedera will provide customers with the best attributes of both companies,” said Paul Sagan, President and CEO-elect of Akamai. “Akamai and Speedera are customer-focused companies that emphasize leading-edge technology development to help businesses and government agencies to deliver more effective, higher performing, and lower cost Websites and online applications. We believe that this combination will benefit our customers, employees and shareholders.”
Akamai was founded in 1998, and Speedera was founded in 1999.
“My colleagues and I at Speedera are very proud of what we have accomplished since the company's founding,” said Ajit Gupta, President, CEO and Founder of Speedera Networks. “We have built a global network, acquired hundreds of customers, and delivered great services that make it possible for our customers to operate more successful online businesses. When we join forces with Akamai, our customers will have access to an even larger, global network and a wider portfolio of leading-edge services supported by a combination of the most experienced teams in the industry. ”
Under terms of the agreement, Akamai will acquire all of the outstanding common stock, preferred stock, and vested and unvested stock options of Speedera and its India-based, wholly-owned subsidiary by issuing approximately 12 million shares of Akamai common stock, which implies the transaction was valued at approximately $130 million based on the closing sale price of Akamai's common stock as reported on the Nasdaq Stock Market on March 15, 2005, the day the merger agreement was signed. The merger transaction is designed to be effected as a tax-free reorganization for Speedera stockholders and is expected to be accounted for by Akamai under the purchase method of accounting. All pending litigation between the two companies is stayed upon signing of the deal and will be formally dismissed when and if the deal is closed.