Ziff Davis has decided to sell its Connectivity division, which includes Ookla (Speedtest) and Downdetector, to Accenture for $1.2 billion in cash. The transaction also includes Ekahau and RootMetrics.
The divestment lets Ziff Davis concentrate more on its main digital media and consumer brands, such as IGN, Mashable, Everyday Health, and iBuyNewCar.
Shares of Ziff Davis went up by over 60% in early trading after the news came out, but Accenture's stock didn't change much.
Strategic reshaping
The deal is part of CEO Vivek Shah's long-term plan to make the company more efficient. Since 2017, Ziff Davis has been working to simplify its portfolio. This included spinning off Consensus Cloud in 2021 and selling Policygenius in 2022.
The money from the sale will be used for general business purposes and for planning how to use the company's money, which is allowed by the company’s loan agreements.
Connectivity started by buying companies like Ookla for $15 million in 2014 and RootMetrics in 2016. The unit saw benefits from the worldwide expansion of 5G and the increased need for internet speed during the pandemic, which helped it earn $231 million last year — about 16% of the total revenue for Ziff Davis.
Boosting Accenture’s AI ambitions
For Accenture, the acquisition helps boost its efforts in using AI for smarter network solutions.
Manish Sharma, Accenture’s chief strategy and services officer, said, "With the Ookla portfolio, we will provide complete network intelligence services that are necessary for AI-based transformation."
The deal is expected to be finalized in the upcoming months. Until then, Ziff Davis will keep running the Connectivity division. Evercore and Citi provided advice to Ziff Davis regarding the transaction, and Kirkland & Ellis acted as their legal counsel.
Ziff Davis is focusing more on media and consumer platforms, while Accenture is acquiring the companies that monitor whether the internet is functioning properly.
Related News