Kontiki Will Be Taken Private

Written by Ryan Lawler

Wednesday, April 30. 2008 at 04:25 PM EDT Post a comment

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Sources have confirmed that VeriSign Inc. (Nasdaq: VRSN) is taking subsidiary Kontiki private in a spinoff that will be announced next Monday.

One source says Kontiki will be going private with funding from MK Capital , one of the venture firms that funded the company before it was sold to VeriSign. The venture firm is reportedly buying Kontiki back at a price well below the $62 million that the company was sold for in 2006, but terms of the deal are not available.

Employees of the P2P firm were notified of the completion of the deal through an internal communication issued earlier this week, says another source. Kontiki is taking with it about 40 employees in the U.S. and the U.K. Eric Armstrong, former VP of sales, media, and entertainment at Verisign, is reportedly taking over as president.

Kontiki was acquired two years ago by Verisign, which intended to leverage the firm's P2P technology and its own data centers and network to build out a global CDN. Those plans were halted, however, soon after a new CEO took over Verisign and decided to focus on its core businesses.

Since then, the company has been looking for a buyer. Sources say that Limelight Networks Inc. (Nasdaq: LLNW) came closest to purchasing the P2P firm, but its bid was not high enough.