On Thursday, Limelight Networks announced that it was looking to raise approximately $71M in a public offering of 10 million shares of its common stock, priced at $7.10 per share.In their filing, the company says they plan to use the money to, “fund capital expenditures for network and other equipment, as well as for working capital and other general corporate purposes.” They also mention they may use a portion of the money to acquire “complementary businesses.“
The offering is expected to close around the first week of March and it will be interesting to see if Limelight uses any of this money to do acquisitions of a similar size like they have done for Delve Networks and EyeWonder. I do think they will do one or two small deals. There are a lot of troubled assets in the market right now and quite a few companies who can’t raise another round of funding who are looking for an exit strategy. The real question is whether or not any of these companies have technologies or a platforms worth acquiring that really fits into the CDN ecosystem.
To date, we have not seen many acquisitions by CDNs and the only ones I remember over the past 18 months have been; Delve Networks and EyeWonder by Limelight, Bandcon by Highwinds and Velocitude by Akamai. It looks as if the CDNs don’t see a lot of potential synergies with their business and other vendors in the market right now.