Edgio Files For Chapter 11 Bankruptcy in Preparation for Sale of Business Units or Entire Company

Edgio announced that it has voluntarily filed for Chapter 11 bankruptcy, and I expect the company to be delisted from the NASDAQ by the end of the day or shortly after. (Updated: Edgio was delisted on Monday September 18) This news does not mean the company is going out of business. Edgio will receive approximately $15.6 million in financing from Lynrock that, following approval by the Court, is expected to ensure that Edgio continues to operate like it is today and throughout the sale process and Chapter 11 Cases.

The purpose of the filing is so that Edgio can sell off part of the business it no longer wants or the entire company, which should allow for the continued operation of the Company’s business under new ownership. It wouldn’t be an asset sale but a business unit sale or the entire company. There is a 40-day bid procedure process, and once all bids are in, the court will decide which is best for the company.

Edgio says they have recently engaged in discussions with several parties that could be interested in acquiring all or part of the Company’s businesses and assets, and by using the Court-supervised sale process, they seek to get the highest or best bid for those assets. As part of this process, Edgio has entered into a “stalking horse” asset purchase agreement with its primary lender Lynrock, which has agreed to acquire assets of the Company through a credit bid for $110 million of the existing secured debt held by Lynrock.

Whatever assets might be sold, Edgio says it is targeting the sale process to be completed in approximately 80 days, if not sooner.

Note: I have never bought, sold, or traded shares in any public CDN, and even in my managed portfolios, Akamai, Fastly, Cloudflare, and Edgio are excluded.