Private equity firm Apollo Global Management this morning announced that it is taking over Yahoo . has completed (formerly known as Verizon Media Group, itself formerly known as Oath) from Verizon. The deal is valued at $5 billion, with $4.25 billion in cash, plus preferred interests of $750 million. Verizon will retain 10% of the new brand name company.
“This is a new era for Yahoo,” Yahoo CEO (and former VZM head) Guru Gowrappan said in a release linked to the news. “The closing of the deal heralds an exciting time of renewed opportunities for us as a standalone entity. We expect the coming months and years to bring new growth and innovation for Yahoo as a company and brand, and we look forward to building that future with our new partners.”
There have been reports that Gowrappan may not be a long-term CEO of Yahoo now that the deal is closed; for now, he is still at the helm.
In addition to the titular Yahoo properties (Mail, Sports, Finance, et al), the group includes us, TechCrunch; AOL; Engaged; and interactive media brand, RYOT. All told, the umbrella brand has approximately 900 million monthly active users worldwide and is currently the third largest internet company, according to Apollo figures.
The deal ends a years-long effort by Verizon to make an all-encompassing move into online media, particularly around adtech, which ultimately proved too expensive, mostly unprofitable and, finally, not core enough for the telco’s larger growth strategy. .
The news comes during a tumultuous time for online media, amid increasing industry-wide consolidation, as many felt within Verizon Media. Verizon acquired AOL in 2015 for $4.4 billion, followed by buy Yahoo two years later for $4.5 billion, combining the two old media properties into a combined group called Oath. At the end of 2018, Oath wrote off $4.6 billion after the merger.
It’s not clear how a new owner will operate that large vessel differently, but one strategy — standard practice for PE companies — could involve Apollo selling off parts of the business or rationalizing it in other ways.
However, Apollo for its part has pledged to continue investing in the newly acquired properties and has secured all jobs at the time of transfer for at least an initial period. The larger Apollo firm has a huge collection of TMT holdings, so it will be interesting to see how and if it takes advantage of that as well.
“We look forward to partnering with Yahoo’s talented workforce to build on the company’s strong momentum and position the new Yahoo for long-term success as a standalone Internet and digital media leader for consumers,” said Apollo partner Reed Rayman in the release. “We couldn’t be more excited about this next chapter for Yahoo as we look to invest in growth across the company, including accelerating customer-facing offerings and trading capabilities, increasing reach and improving the everyday user experience.”