The American telecom provider has decided to split off its entire media division. The various media under Verizon will be in the hands of private equity firm Apollo Global Management, which is putting down 5 billion dollars (over 4 billion euros) for the business.
Verizon’s media branch is the result of two acquisitions the company made in the past decade. In 2015, the company acquired AOL and in 2017 it added Yahoo. In total, the company paid more than 9 billion dollars for it, some 7.5 billion euros. The entire branch continued under the name Oath, later renamed Verizon Media. The takeover of AOL brought with it, in addition to AOL itself, names such as The Huffington Post, TechCrunch and Engadget. With the Yahoo takeover, Verizon also acquired Tumblr. Both The Huffington Post and Tumblr were later sold again.
Apollo Global Management will pay 5 billion dollars for the acquisition, of which 4.25 billion in cash and 750 million in preferred interests. Verizon will also retain a 10 percent stake in the new company. Guru Gowrappan, who serves as CEO of Verizon Media, will continue in the same role at Yahoo. Before the acquisition can be completed, there is still some bureaucracy to be completed. The deal is expected to be completed in the second half of the year.
“We are excited to be joining forces with Apollo,” saidGowrappan. “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.”
The buyer, Apollo, is one of the largest private equity firms in the world. The firm owns many different kinds of businesses, from resorts to hardware stores. It also owns several companies in the telecoms market, such as Cox Media.
“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.”
Rumours about the future of Verizon’s media division had been circulating for some time. The company had invested many billions in the project and had the ultimate goal of achieving annual sales of 10 billion dollars. This goal was ultimately not achieved, with the result that the company decided to split off.