Private equity firm Apollo Global Management this morning announced that it has completed its acquisition of Yahoo (formerly known as Verizon Media Group, itself formerly known as Oath) from Verizon. The deal is worth $5 billion, with $4.25 billion in cash, plus preferred interests of $750 million. Verizon will be retaining 10% of the newly rebranded company.
“This is a new era for Yahoo,” Yahoo CEO (and former VZM head) Guru Gowrappan said in a release tied to the news. “The close of the deal heralds an exciting time of renewed opportunity for us as a standalone entity. We anticipate that the coming months and years will bring fresh growth and innovation for Yahoo as a business and a brand, and we look forward to creating that future with our new partners.”
There have been reports that Gowrappan might not stay on as CEO of Yahoo for the long term now that the deal has closed; for now he's still at the helm.
In addition to its titular Yahoo properties (Mail, Sports, Finance, et al.), the group includes us, TechCrunch; AOL; Engadget; and interactive media brand, RYOT. All told, the umbrella brand encompasses around 900 million monthly active users globally and is currently the third-largest internet property, per Apollo’s figures.
The deal puts to a close a years-long effort by Verizon to make a comprehensive move into online media, specifically around adtech, which ultimately proved to be too costly, mostly unprofitable and, finally, not core enough to the telco's bigger growth strategy.
The news comes during a tumultuous time for online media, amid increasing industry-wide consolidation, many felt within Verizon Media. Verizon acquired AOL in 2015 for $4.4 billion, followed by buying 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 wrote down $4.6 billion, following the merger.
It's not clear how a new owner will steer that large ship differently, but one strategy -- standard practice for PE firms -- could involve Apollo selling off parts of the business or rationalizing it in other ways.
However, for its part, Apollo has promised to continue investing in the newly acquired proprieties, and it has secured all jobs at the time of handover for at least an initial period. The bigger firm of Apollo has a massive set of TMT, holdings so it will be interesting to see how and if it leverages that, too.
“We look forward to partnering with Yahoo's talented employee base to build on the company's strong momentum and position the new Yahoo for long-term success as a standalone consumer internet and digital media leader,” Apollo Partner Reed Rayman said in the release. “We couldn’t be more excited about this next chapter for Yahoo as we look to invest in growth across the business, including accelerating its customer-first offerings and commerce capabilities, expanding its reach and enhancing the daily user experience.”