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Akamai Technologies to Acquire Prolexic for $370 Million

By Tim Brugger – Dec 2, 2013 at 1:53PM

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Cloud security services provider Akamai adds to its product suite with the acquisition.

Similar to deals in the past year for IP platform and network solutions providers Verivue and FastStop, cloud content delivery specialist Akamai Technologies (AKAM 0.30%) announced today it will add to its product suite via acquisition after signing a definitive agreement to acquire Prolexic for $370 million in cash. As of the end of September, Akamai reported cash and equivalents of $566.3 million on its balance sheet.

The acquisition will enhance Akamai's cloud-based network and data center security solutions by adding Prolexic's suite of distributed denial of service (DDoS) products. DDoS is a networkwide attack in which one computer system is compromised, and then malware is used to infect other systems on the network. By flooding the entire network with incoming messages, a DDoS attack can force a shutdown of an entire network.

Commenting on the transaction, Akamai CEO Tom Leighton said, "By joining forces with Prolexic, we intend to combine Akamai's leading security and performance platform with Prolexic's highly regarded DDoS mitigation solutions for data center and enterprise applications protection."

The deal, which is subject to regulatory and customary closing conditions, is expected to be dilutive to Akamai's non-GAAP earnings in the first year by approximately $0.06 to $0.08 per share. Akamai anticipates the transaction will close in the first half of 2014.



Fool contributor Tim Brugger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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