Akamai announced its acquisition of application-acceleration company Netli on February 5, 2007, and completed the deal on March 13. Akamai’s 2009 filing put the aggregate purchase price at $154.4 million, primarily in Akamai stock. The strategic aim was to combine Netli’s acceleration technology with Akamai’s global network and traffic-routing capabilities.
When did Akamai acquire Netli?
Akamai and Netli announced a definitive merger agreement on February 5, 2007. The transaction closed on March 13, 2007; Akamai issued its completion announcement on March 14. At closing, Netli became a wholly owned Akamai subsidiary through a merger.
How much did Akamai pay?
Akamai’s 2009 Form 10-K reported an aggregate purchase price of $154.4 million. The components were:
| Component | Reported value |
|---|---|
| Akamai common stock | $139.4 million |
| Fair value of stock options | $14.1 million |
| Transaction costs | $0.8 million |
The consideration was primarily stock rather than cash. Akamai issued approximately 2.8 million common shares and assumed options to purchase approximately 400,000 Akamai shares. About 1.1 million of the issued shares were placed in escrow, mainly to secure indemnification obligations. Netli shares were canceled and converted into Akamai common stock; outstanding Netli options were assumed and converted into Akamai options.
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What did Netli do, and why was it strategically important?
Netli brought a high-performance communications protocol and expertise in application acceleration. Akamai’s stated goal was to use those capabilities alongside its worldwide server network and ability to route Internet traffic around congestion points, enhancing acceleration for Web and other Internet-based applications.
The strategic logic was to address both the delivery of content and the performance of applications. Akamai president and CEO Paul Sagan said, “We believe the majority of today’s successful enterprises doing business online require both content and application acceleration.” Akamai described the combined offering as “a compelling and comprehensive set of solutions.” Its 2007 annual report likewise listed the acquisition as a March milestone intended to enhance application acceleration.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What early financial impact did Akamai report?
Akamai’s first-quarter 2007 results included Netli for the 18 days after the March 13 closing. Netli contributed approximately $500,000 in revenue during that period. This is a short post-close contribution, not a measure of Netli’s revenue for a full year.
The available filings do not establish a standalone long-term performance series for Netli after integration. The reported first-quarter figure therefore shows only its initial contribution within Akamai’s results, not whether the acquisition ultimately met its strategic or financial goals.
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