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Tech Industry

Akamai buys InterVu for $2.8B

Akamai Technologies Inc. (Nasdaq: AKAM) said Monday it plans to acquire InterVu Inc. (Nasdaq: ITVU), which develops systems to deliver video and audio over the Internet, for about $2.8 billion in stock.

Akamai, which provides services that speed up delivery of Web content, said the acquisition will bolster its product offerings and position it for broadband access. Akamai, which went public in October priced at $26, has been bolstering its broadband portfolio in recent weeks. Last month, the company bought Network24 Communications for $200 million.

Under terms of the InterVu agreement, Akamai will issue about 9.3 million common shares in exchange for all outstanding shares of InterVu at a ratio of 0.5957 Akamai share for each InterVu share. The deal values each InterVu share at nearly 140, well above the stock's Friday closing price of $117. Akamai closed at 235.

The combined company will have more than 1,000 customers including AOL MovieFone, Apple, CBS, CNN among others. The companies said they will also be able to deliver content across all platforms. Akamai is exclusive network provider for Apple QuickTime TV and InterVu distributes content in both RealNetworks (Nasdaq: RNWK) and Microsoft (Nasdaq: MSFT) formats.

Akamai, based in Cambridge, Mass.-based, said it will convert outstanding options and warrants of InterVu into about 2.8 million Akamai options and warrants, the companies said in a statement.

The acquisition, which must be approved by regulators and InterVu stockholders, is expected to close in the second quarter.