EGIO - Edgio could become focus for investors if Akamai is acquired analyst says

Much smaller Akamai Technologies ( AKAM ) competitor Edgio Inc. ( NASDAQ: EGIO ) may receive investor interest if Akamai is acquired as was speculated on Thursday, according to Truist. Edgio rose 2.2%.

"Should we witness a private equity led bid for Akamai we believe investor interest in the much smaller edge competitor Edgio should increase," Truist analyst Greg P. Miller wrote in a note on Friday.

While Edgio ( EGIO ) is "well behind AKAM in developing its software security application, the recently closed purchase of Edgecast will "effectively doubles the size" of the business is likely to result in EBITDA growth that "well exceeds" organic revenue growth, according to Miller, who has a buy rating adn $8 price target on EGIO.

Edgio ( EGIO ) was formed last month after Limelight Networks completed its purchase of Yahoo's Edgecast and rebranded the combined company as Edgio.

Akamai ( AKAM ) gained 5% on Thursday on speculation of takeover interest for the cloud services and content delivery company. An unidentified private equity firm is said to be in talks to try to secure financing for a potential offer for Akamai, according to a StreetInsider report.

Akamai ( AKAM ) has a market cap of almost $15 billion, while Edgio ( EGIO ) is value at over $500 million.

Cowen analyst Michael Elias wrote Thursday that he believed Akamai ( AKAM ) may be worth $130/share in a possible takeover.

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