March 3 (Reuters) - Ziff Davis has agreed to sell its Connectivity division, which houses Ookla's Speedtest app and Downdetector outage tracker, to Accenture for $1.2 billion in cash.
The sale, which also includes Ekahau and RootMetrics, will allow Ziff Davis to focus on enthusiast websites like IGN and Mashable, as well as Everyday Health and iBuyNewCar.
Shares of Ziff Davis rose more than 60% in early trading, while Accenture was flat.
The sale builds on a streamlining push under CEO Vivek Shah since 2017 through moves like the 2021 Consensus Cloud spin-off and 2022 Policygenius insurance brokerage sale.
Proceeds from the transaction are expected to be used for general corporate purposes and capital allocation activities, in line with the firm's debt agreements, Ziff Davis said.
Connectivity traces its roots to bolt-on acquisitions such as Ookla for $15 million in 2014 and RootMetrics in 2016. The unit capitalized on the global 5G rollout and pandemic-driven surge in bandwidth demand, generating $231 million in revenue last year, or about 16% of Ziff Davis' total.
"With the Ookla portfolio, we will offer end-to-end network intelligence services essential for AI-based transformation," said Manish Sharma, chief strategy and services officer, Accenture.
The sale eyes closure in coming months, during which Ziff Davis will continue to operate the unit.
Evercore and Citi advised Ziff Davis on the transaction, with Kirkland & Ellis handling legal matters.
Reporting by Kritika Lamba in Bengaluru; Editing by Vijay Kishore
Source: Reuters