Akamai officially strikes deal to acquire rival Cotendo

It's official, Akamai's rumored proposal to purchase Cotendo is true as the two companies have signed an agreement for Akamai to acquire the Israeli-based web acceleration provider.

By acquiring Cotendo, Akamai will be able to bolster its CDN capabilities with Cotendo's suite of integrated Web and mobile acceleration services.

"As we look to accelerate growth across the dynamic landscapes of cloud and mobile optimization, we are excited to be joining forces with Cotendo," said Paul Sagan, president and CEO of Akamai. "Cotendo's technology, partnerships and people are a strong complement to Akamai. Together, we believe there is tremendous opportunity for our combined technologies as enterprises embrace the move to the cloud and seek solutions for an increasingly mobile world."

Akamai will acquire all of the outstanding equity of Cotendo in exchange for a net cash payment of approximately $268 million, after expected purchase price adjustments, plus the assumption of outstanding unvested options to purchase Cotendo common stock. The company expects to close the deal following customer closing conditions and regulatory approvals in the first half of 2012.  

Of course, Akamai wasn't the only one that's expressed interest in purchasing Cotendo. Previous reports had indicated Akamai was competing with Juniper Networks (Nasdaq: JNPR) and AT&T (NYSE: T) for the company, which has been for sale since Akamai filed suit against it.

As reported in FierceOnlineVideo, AT&T was integrating Cotendo's app acceleration and dynamic site acceleration with its network. The telco said it would charge 50 percent of what Akamai charges and be "extremely happy" with the margin.

Overall, Cotendo has been a profitable company. For 2011, the company has forecast $20-$30 million in sales, with a distribution agreement with AT&T adding an additional $30 million in revenue to its coffers by 2015. In addition to AT&T, Cotendo also provides services to the likes of Facebook, Microsoft (Nasdaq: MSFT) and Google (Nasdaq: GOOG).

For more:
- see the release
- here's FierceOnlineVideo's take

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