P/E Firm Said Lining Up Financing for Potential Akamai (AKAM) Bid - Source

July 21, 2022 11:05 AM EDT

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A private equity firm is said to be in talks with banks to secure financing to launch a potential formal bid for Akamai (NASDAQ: AKAM), according to a source. Given that funding markets are tighter due to rising interest rates and macro concerns, it is unclear how successful the financing will be and if it will lead to a bid.

While the name of the private equity firm was not disclosed it is worth noting that recent market rumbling has suggested that Elliott Management could again be circling the name, although this could not be verified. In 2018, Elliott built a stake in the company but moved on once a quick sale of the company could not be ascertained. In addition to its activist investor activities, Elliott Management has a private equity arm.

As the backbone of the internet, Akamai has seen solid growth over the last few decades however this growth is seen slowing down. This year, revenue is projected to grow only 5% and EPS could be down. In addition, forex headwinds could impact results. Still, a takeover of Akamai would be a worthy prize for a tech-focused private equity firm, which may be able to strip out costs to increase profits and improve efficiencies to grow revenue faster, especially in web security.

Akamai has not responded to a request to comment on the rumor.

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