Edgio, a media content and cybersecurity solutions provider, has voluntarily filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. The company aims to complete one or more sale transactions, allowing its business to continue operating under new ownership.
Edgio’s primary lender, Lynrock Lake Master Fund, is supporting the sale process. The company has entered into a stalking horse asset purchase agreement with Lynrock, which plans to acquire Edgio’s assets through a $110 million (€99.7 million) credit bid of its existing secured debt.
Before filing for Chapter 11, Edgio engaged in discussions with several interested parties regarding the potential sale of all or part of its businesses and assets. Through a court-supervised sale process, the company now seeks the highest or best bid for its assets, including its product offerings.
The company expects to complete the sale process within approximately 80 days.
Todd Hinders, CEO of Edgio, expressed confidence that the process will enable the company to continue providing video streaming and web security solutions to its more than 935 global customers.
Edgio has also secured $15.6 million in debtor-in-possession (DIP) financing from Lynrock to ensure uninterrupted service delivery throughout the bankruptcy proceedings. The company has filed first-day motions seeking court approval to continue paying employee wages, supporting operations, and maintaining relationships with critical vendors during the sale process.
Who might buy Edgio?
Several types of potential buyers might be interested in acquiring Edgio, given its role in media content delivery and cybersecurity solutions. Here are some possible candidates:
1. Competitors in the Content Delivery Network (CDN) Market
- Akamai Technologies: As one of the largest CDN providers, Akamai might see an opportunity to expand its customer base or capabilities by acquiring Edgio’s assets, especially in video streaming and cybersecurity.
- Cloudflare: A growing player in the CDN space, Cloudflare could potentially benefit from acquiring Edgio’s infrastructure and cybersecurity solutions to further strengthen its portfolio.
- Fastly: Fastly has been expanding its edge computing and CDN services and might be interested in acquiring Edgio’s assets to enhance its market position and technology offering.
2. Tech Giants with Cloud or Streaming Interests
- Amazon (AWS): With AWS operating one of the largest cloud infrastructures globally, Amazon could benefit from Edgio’s CDN and cybersecurity assets, integrating them into its AWS CloudFront or security services.
- Google (Google Cloud): Google might see value in Edgio’s media streaming capabilities to bolster its Google Cloud Platform or YouTube streaming services.
- Microsoft (Azure): Microsoft Azure has been enhancing its CDN services and media streaming capabilities, making Edgio a potential acquisition target to expand its reach.
3. Private Equity Firms
- Lynrock Lake Master Fund: As Edgio’s primary lender, Lynrock Lake has already made a stalking horse bid. If no higher bids materialize, Lynrock could take control of Edgio’s assets, aiming to restructure or eventually sell parts of the company.
- Other Private Equity Firms: Firms specializing in technology, media, or infrastructure may see an opportunity to acquire Edgio at a potentially lower price during the bankruptcy process, restructure it, and eventually sell for profit.
4. Telecommunications and Media Companies
- Verizon: Verizon has already invested heavily in digital media and content delivery through its Verizon Digital Media Services (VDMS) and may look at Edgio as an opportunity to expand further.
- Comcast: With its Xfinity and NBCUniversal assets, Comcast could benefit from Edgio’s technology to improve its streaming services and cybersecurity offerings.
5. Cybersecurity Companies
- Palo Alto Networks: A cybersecurity giant like Palo Alto Networks could acquire Edgio to strengthen its cloud security and CDN protection solutions.
- Fortinet: As a major player in the cybersecurity space, Fortinet might see an opportunity in Edgio’s cybersecurity offerings to enhance its services.
6. Media and Entertainment Companies
- Netflix: Netflix, as a major player in video streaming, might have an interest in acquiring Edgio’s video delivery capabilities to improve its content distribution network or enhance security for its platform.
Given the court-supervised process and the assets on offer, any of these players could be potential bidders. The final buyer will likely depend on which company sees the most strategic value in Edgio’s media and cybersecurity assets.
