Funds managed by affiliates of Apollo Global Management have entered into an agreement to acquire Verizon Media for $5 billion, from its parent company, Verizon. Verizon will retain a 10 percent stake in the company, which will be known as Yahoo at close of the transaction and continue to be led by CEO Guru Gowrappan.
Verizon Media is comprised of brands such as Yahoo and AOL, as well as other ad tech and media platform businesses. The deal is a corporate carveout.
“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 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.”
“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.”
Under the terms of the agreement, Verizon will receive $4.25 billion in cash and preferred interests of $750 million. The transaction includes the assets of Verizon Media, including its brands and businesses.
Goldman Sachs served as lead financial advisor to Verizon in the transaction. Evercore also served as financial advisor to Verizon. Kirkland & Ellis LLP and Freshfields Bruckhaus Deringer LLP are serving as legal counsel to Verizon. LionTree served as lead financial advisor to and will invest alongside the Apollo Funds, bringing its global strategic relationships to Yahoo as the company continues to accelerate growth and pursue strategic investments in key verticals and product areas. RBC Capital Markets also served as financial advisor to the Apollo Funds in connection with the transaction, alongside Barclays, BMO Capital Markets Corp., Deutsche Bank and Mizuho Securities USA LLC; all are also providing financing for the transaction. Mizuho Securities USA LLC also served as lead structuring advisor to the Apollo Funds. Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal counsel to the Apollo Funds.