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Will Court Nod for Select Edgio Asset Acquisition Boost AKAM Stock?
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Akamai Technologies, Inc. (AKAM - Free Report) has secured the requisite approval from the U.S. Bankruptcy Court for the District of Delaware to acquire select assets of the bankrupt media firm Edgio Inc. The to-be-acquired asset portfolio includes certain customer contracts from Edgio's content delivery and security businesses and the non-exclusive license rights to its patents. It excludes the acquisition of Edgio personnel, technology or assets related to the network.
Edgio filed for bankruptcy in September this year, putting $379 million worth of assets up for grabs. It aimed to use the court-supervised sale process to seek the highest bid for its assets to maintain uninterrupted video streaming and web security services to 935 global customers. Following the court-monitored process, Akamai emerged as the highest bidder for the said assets.
What’s in the Offing for AKAM?
The deal is likely to be accretive to Akamai, offering hundreds of new customers and potentially augmenting its revenue-generating capabilities. The seamless transition of customers will give them immediate access to the full portfolio of Akamai’s cybersecurity and cloud computing services.
The company expects the transaction to generate incremental revenues of $9-$11 million in the fourth quarter, despite offering transition services costs to the tune of $15-$17 million to Edgio. The transaction is anticipated to be dilutive to non-GAAP earnings by 3-5 cents in the fourth quarter, inclusive of the transition service costs.
For 2025, Akamai anticipates the transaction to generate $80-$100 million in revenues and $25-$30 million of transition service costs, resulting in an accretive non-GAAP net income of 15-20 cents per share.
The deal is likely to unlock new opportunities for Akamai with the potential to cross-sell and up-sell. Consequently, the shares are likely to witness a healthy uptrend in the future.
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InterDigital, Inc. (IDCC - Free Report) sports a Zacks Rank of 1 at present. It has a long-term growth expectation of 17.44%. IDCC is a pioneer in advanced mobile technologies enabling wireless communications and capabilities. The company designs and develops a whole range of advanced technology solutions for use in digital cellular as well as wireless 3G, 4G, and IEEE 802-related products and networks.
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Will Court Nod for Select Edgio Asset Acquisition Boost AKAM Stock?
Akamai Technologies, Inc. (AKAM - Free Report) has secured the requisite approval from the U.S. Bankruptcy Court for the District of Delaware to acquire select assets of the bankrupt media firm Edgio Inc. The to-be-acquired asset portfolio includes certain customer contracts from Edgio's content delivery and security businesses and the non-exclusive license rights to its patents. It excludes the acquisition of Edgio personnel, technology or assets related to the network.
Edgio filed for bankruptcy in September this year, putting $379 million worth of assets up for grabs. It aimed to use the court-supervised sale process to seek the highest bid for its assets to maintain uninterrupted video streaming and web security services to 935 global customers. Following the court-monitored process, Akamai emerged as the highest bidder for the said assets.
What’s in the Offing for AKAM?
The deal is likely to be accretive to Akamai, offering hundreds of new customers and potentially augmenting its revenue-generating capabilities. The seamless transition of customers will give them immediate access to the full portfolio of Akamai’s cybersecurity and cloud computing services.
The company expects the transaction to generate incremental revenues of $9-$11 million in the fourth quarter, despite offering transition services costs to the tune of $15-$17 million to Edgio. The transaction is anticipated to be dilutive to non-GAAP earnings by 3-5 cents in the fourth quarter, inclusive of the transition service costs.
For 2025, Akamai anticipates the transaction to generate $80-$100 million in revenues and $25-$30 million of transition service costs, resulting in an accretive non-GAAP net income of 15-20 cents per share.
The deal is likely to unlock new opportunities for Akamai with the potential to cross-sell and up-sell. Consequently, the shares are likely to witness a healthy uptrend in the future.
AKAM’s Zacks Rank
Akamai currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Picks
Workday Inc. (WDAY - Free Report) , carrying a Zacks Rank #2 (Buy), is a foremost supplier of enterprise-level software solutions for human resource and finance management. WDAY changes the way analytical insights and contributions to decision-making are made available to businesses by integrating finance and human resources as one system on the cloud.
InterDigital, Inc. (IDCC - Free Report) sports a Zacks Rank of 1 at present. It has a long-term growth expectation of 17.44%. IDCC is a pioneer in advanced mobile technologies enabling wireless communications and capabilities. The company designs and develops a whole range of advanced technology solutions for use in digital cellular as well as wireless 3G, 4G, and IEEE 802-related products and networks.
Ericsson (ERIC - Free Report) carries a Zacks Rank #2 at present. In the last reported quarter, it delivered an earnings surprise of 22.22%. A leading provider of telecom services, communication networks, and support solutions, Ericsson is also diversifying into the provision of ICT (information and communications technology) solutions.