Tech Dealmaker Awards

Akamai Technologies Inc. and Netli Inc. did pretty much the same thing — so Akamai bought Netli to do it better.

Cambridge-based Akamai helps companies run their business applications over the web efficiently. Mountain View, Calif.-based Netli offered services complementary to Akamai’s, and its high performance communications protocol appealed to Akamai. During the fourth quarter 2006, Akamai made an offer to purchase Netli.

“Netli has a niche focus in the application performance services space, and has a really good team behind them. We were both offering similar services to the same market, and by combining Netli’s protocol with our technology, we can solve problems better,” said Akamai vice president of business development Robert Wood.

The two companies are working together, integrating products and services to improve efficiency of Internet-based business applications. “Business customers want to run their applications over IP instead of private lines, but the Internet wasn’t built to network for business,” said Wood.

The merger also allowed Akamai to increase its services portfolio and expand clientele, which includes the three biggest mobile phone suppliers, and the two largest computer manufacturers.

The companies focus on application delivery and WAN optimization. Spending for application acceleration is expected to increase to $3.3 billion by 2010, according to Gartner research, and Akamai saw promise in Netli, named one of the 2006 100 most innovative tech companies in the world by AlwaysOn.com.

— Bridget Botelho is a freelance writer in Providence, R.I.

Category

Top Software/Services M&A Deals Buy Side

The Deal

Akamai purchased competitor Netli Inc. for $117.6 million. Closed as of March 14, 2007

Key Executives

Paul Sagan, CEO, Akamai; Robert Wood, vice president, Akamai; J.D. Sherman, CFO; Akamai; Thomas Leighton, co-founder, Akamai.

Deal advisers

Legal: Latham & Watkins LLP.
Financial: Alta Partners; Bessemer Venture Partners; BlueRun Ventures; Granite Global Ventures; Leapfrog Ventures; Morgenthaler; Reed Elsevier Ventures.

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