Verizon (NYSE: VZ) and Apollo Global Management, Inc. (NYSE: APO) say they have reached an agreement that will funds managed by affiliates of Apollo buy 90% of Verizon Media for $5 billion. Verizon will retain the remaining 10% stake in the company, which largely comprises the former Yahoo! and AOL. Apollo will rename the company Yahoo when the deal closes, and current CEO Guru Gowrappan will retain his role. The two companies expect the transaction to complete in the second half of this year.
Verizon will receive $4.25 billion in cash and preferred interests of $750 million. In addition to Verizon’s Yahoo! and AOL properties. Verizon Media also comprises what the transaction partners term “leading ad tech and media platform businesses.” The unit serves almost 900 million monthly active users worldwide.
The U.S. based Tier 1 service provider purchased AOL and Yahoo! in 2015 and 2017, respectively (see “Wireless, OTT video at heart of Verizon's AOL buy” and “Verizon completes Yahoo! buy, combines with AOL to create Oath”) for a combined $8.9 billion. So it is getting just over half of its original investment back for the combined business unit, originally called Oath.
“We are excited to be joining forces with Apollo,” said Guru Gowrappan, CEO, Verizon Media. “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 capitalize 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 organization 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.”
“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.”
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