Verizon and Apollo Global Management have announced that funds managed by affiliates of Apollo have entered into an agreement to acquire Verizon Media for $5 billion.
Verizon will retain a 10% stake in the company, which will be known as Yahoo at the close of the transaction and continue to be led by CEO Guru Gowrappan.
A leading global technology and media company, Verizon Media is comprised of brands such as Yahoo and AOL, as well as leading ad tech and media platform businesses. The corporate carve out will allow Verizon Media to aggressively pursue growth areas.
“We are excited to be joining forces with Apollo,” said Gowrappan. “The past two quarters of double-digit growth have demonstrated our ability to transform our media ecosystem. With Apollo’s sector expertise and strategic insight, Yahoo will be well positioned to capitalise on market opportunities, media and transaction experience, and continue to grow our full stack digital advertising platform. This transition will help to accelerate our growth for the long-term success of the company.”
“We are thrilled to help unlock the tremendous potential of Yahoo and its unparalleled collection of brands,” said Reed Rayman, private equity partner at Apollo. “We have enormous respect and admiration for the great work and progress that the entire organisation has made over the last several years and we look forward to working with Guru, his talented team and our partners at Verizon to accelerate Yahoo’s growth in its next chapter.”
“We are big believers in the growth prospects of Yahoo and the macro tailwinds driving growth in digital media, advertising technology and consumer internet platforms,” said David Sambur, senior partner and co-head of private equity at Apollo. “Apollo has a long track record of investing in technology and media companies and we look forward to drawing on that experience to help Yahoo continue to thrive.”
“Verizon Media has done an incredible job turning the business around over the past two and a half years and the growth potential is enormous,” said Hans Vestberg, CEO, Verizon. “The next iteration requires full investment and the right resources. During the strategic review process, Apollo delivered the strongest vision and strategy for the next phase of Verizon Media. I have full confidence that Yahoo will take off in its new home.”
Verizon Media reported strong, diversified year-over-year revenue growth in the past two quarters, driven by innovative ad offerings, consumer ecommerce, subscriptions, betting and strategic partnerships. Yahoo, one of the best recognized digital media brands in the world and the fourth most visited internet property globally, continues to evolve as a key destination for finance and news among Gen Z. This was most recently marked by Yahoo News becoming the fastest growing news organisation on TikTok.
Under the terms of the agreement, Verizon will receive $4.25 billion in cash, preferred interests of $750 million and retain a 10% stake in Verizon Media. The transaction includes the assets of Verizon Media, including its brands and businesses. The transaction is subject to satisfaction of certain closing conditions and expected to close in the second half of 2021.