Akamai to Acquire INTERVU for $2.8 Billion
Content delivery provider Akamai (http://www.akamai.com) announced it was acquiring INTERVU (
http://www.intervu.net) in a stock-for-stock transaction valued at approximately $2.8 billion.
This deal catapults Akamai into the largest provider of streaming media delivery services. The companies' delivery network will have more than 3,000 servers in 40 countries.
Akamai has been using its stock recently for acquisition. On January 18th, it acquired Network24, a provider of business-to-business video services for training and internal communications. INTERVU too, has a big presence in the business market. It acquired web conferencing provider NetPodium in August 1999.
Akamai's biggest competitor, Digital Island (http://www.digitalisland.com) has also been making big moves in the streaming media market. It merged with content delivery company Sandpiper Networks in October 1999 and last month acquired webcaster Live On Line for $70 million.
"By combining with INTERVU we will create the hands down leader in the field of Internet streaming," said George Conrades, chairman and CEO of Akamai. "This merger will solidify Akamai's position in the streaming arena and will provide customers with the most comprehensive, end-to-end content delivery solution in the market today."
The combined company will support all leading streaming media formats, and will have over 1,000 customers, including AOL MovieFone, Apple, CBS Corporation, CNN, General Motors, GO Network, IBM, Microsoft, NBC, Paramount Digital Entertainment, Quokka Sports, Turner Broadcasting, Universal Studios, and Viacom.
"By joining forces with an organization of Akamai's caliber, we can truly empower our customers with the broadest range of content delivery solutions available. Our combined company will be poised to become the de facto standard for integrated media delivery services," according to Harry Gruber, founder and CEO of INTERVU. "We are confident that together we will introduce a new generation of streaming, including enhanced performance and reliability, to the Web's top properties."
Perhaps one of the biggest gains for Akamai will be INTERVU's almost universal acceptance and familiarity in the streaming media space. Not only are big name companies among some of INTERVU's customers, but it has received some big name investors as well. In December Time Warner's CNN and Microsoft invested $20 million and $30 million in INTERVU, respectively.
Under terms of the agreement, each share of INTERVU common stock will be exchanged for 0.5957 shares of Akamai common stock. Akamai will acquire INTERVU by issuing approximately 9.3 million shares of Akamai common stock in exchange for all outstanding shares of INTERVU stock.
The acquisition is expected to close during the second quarter of 2000.