Credit: Shutterstock photoYesterday, Amazon Web Services (AWS), a subsidiary of Amazon.comAMZN , announced that it is in the process of acquiring the Portland-based company, Elemental Technologies.
According to Information - the first news site to report the story - the offer was for about $500 million in cash. The terms of the deal have not been disclosed.
More on Elemental Technologies
Established in 2006, Elemental offers back-end services for video content streaming across a variety of devices and platforms.
Elemental's technology primarily helps big media and entertainment companies, like ESPN and HBO, to take their video - originally created for cable or broadcast - and reformat it for mobile and desktop.
Notably, Elemental's technology was used for live streaming last year's Winter Olympics across a range of devices such as TV, mobile and personal computer. Currently, the company caters to more than 700 customers.
The Acquisition
In a statement, Andy Jassy, Senior Vice President of AWS, said, "Elemental shares Amazon's passion for invention and putting the customer first."
He went on to say that the two companies will work together to further integrate their technologies and infrastructure offerings. This, in turn, will enable media and entertainment businesses to enhance their hybrid and cloud models while offering innovative services.
Following the acquisition, which is expected to close in the fourth quarter according to Fortune, Elemental will continue operating under its present brand.
The buyout makes sense for Amazon considering that streaming video plays a huge role in its business and viewers want to enjoy movies and sports events using the Internet to avoid hiccups that mar the viewing experience.
If reports about the deal value turn out to be true, it will be Amazon's fifth-largest acquisition in its more than 20-year history.
Amazon currently sports a Zacks Rank #1 (Strong Buy).
Other stocks in the same space that investors may consider are Stamps.com Inc. STMP , Travelport Worldwide Limited TVPT and Autobytel Inc. ABTL . While Stamps.com and Travelport have the same Zacks Rank as Amazon, Autobytel carries a Zacks Rank #2 (Buy).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
