Private equity firm Apollo Global Management announced this morning that it has completed the acquisition of Yahoo (formerly Verizon Media Group, itself formerly known as Oath) from Verizon. The deal is worth $ 5 billion, with $ 4.25 billion in cash, plus senior interest of $ 750 million. Verizon will retain 10% of the newly renamed company.
“This is a new era for Yahoo,” Yahoo CEO (and former VZM chief) Guru Gowrappan said in a news release. “The conclusion of the agreement heralds an exciting time of renewed opportunities for us as a stand-alone entity. We anticipate that the coming months and years will bring further growth and innovation for Yahoo as a company and a brand, and we look forward to creating that future with our new partners. “
It has been reported that Gowrappan may not stay long-term as CEO of Yahoo now that the deal is done; for now, he is still at the helm.
In addition to its incumbent Yahoo properties (Mail, Sports, Finance, et al.), The group includes us, TechCrunch; AOL; Engadget and interactive media brand, RYOT. In total, the umbrella brand encompasses around 900 million monthly active users worldwide and is currently the third largest internet property, according to figures from Apollo.
The deal ends a multi-year effort by Verizon to make a global transition to online media, particularly around ad technology, which ultimately turned out to be too expensive, mostly unprofitable, and ultimately uneconomic. important enough to the telecommunications company’s broader growth strategy.
The news comes at a tumultuous time for online media, amid increasing industry-wide consolidation that many have felt within Verizon Media. Verizon acquired AOL in 2015 for $ 4.4 billion, then Yahoo for $ 4.5 billion two years later, combining the two legacy media properties into a combined group named Oath. At the end of 2018, Oath depreciated $ 4.6 billion as a result of the merger.
It’s not clear how a new owner will run this large ship differently, but one strategy – standard practice for private equity firms – could involve Apollo selling parts of the business or streamlining it from another way.
However, for his part, Apollo has pledged to continue investing in the newly acquired properties, and he has secured all jobs upon handover for at least an initial period. Apollo’s largest company has a massive set of stakes in TMT, so it will be interesting to see how and if it leverages that as well.
“We look forward to partnering with Yahoo’s talented employee base to leverage the strong business momentum and position the new Yahoo for long-term success as a standalone leader in the consumer Internet and digital media, ”Apollo partner Reed Rayman said in the statement. “We couldn’t be more excited about this next chapter for Yahoo as we look to invest in the growth of the business, including accelerating its customer-centric business offerings and capabilities, expanding its reach and improving the daily user experience. “