Simpson Thacher & Bartlett will be advising Yahoo! in their recently announced purchase of social blogging platform Tumblr. The deal, which was announced yesterday, sees internet leader Yahoo! pay more than $1.1 billion cash for ownership of Tumblr, which, while extremely popular, has yet to generate significant revenue.
The deal is one of the most significant purchases Yahoo! has made since it was founded, and is comparable to the company’s $1.6 billion acquisition of Overture Services in 2003. Recently appointed Yahoo! CEO Marissa Mayer has, over the last twelve months maintained that the search engine giant would focus on smaller acquisitions and better developing existing products. Mayer told the Wall Street Journal that the purchase of Tumblr would is definitely an exception.
Once the purchase is finalized by the end of the year, Tumblr will be operated independently of Yahoo!, and Tumblr founder David Karp will remain as CEO. Tumblr currently has more than 300 million unique visitors each month, and 120,000 new users create accounts with the service each day.
American Lawyer reports that Simpson is advising Yahoo! on the Tumblr deal, and that this effort is led by the firm’s New York M&A partner Gary Horowitz. Palo Alto M&A partner Kristen Jensen is also advising, along with tax partner Katharine Moir and compensation and benefits partner Tristan Brown. Associates working on the matter include Linda Barrett, Sean Crnkovich, Andrew Nightingale, and Cara Walsh.
Tumblr will be working with Gunderson Dettmer