BusinessAkamai to acquire cloud-based security solutions provider Prolexic

Akamai Technologies, Inc. (NASDAQ: AKAM) and Prolexic Technologies, Inc. yesterday announced that the two companies have signed a definitive agreement for Akamai to acquire Prolexic, a provider of cloud-based security solutions for protecting data centers and enterprise IP applications from distributed denial of service (DDoS) attacks.

Akamai notes that organizations, faced with an ever-changing threat landscape, require comprehensive security solutions that address many different protection scenarios. These include securing mission critical Web properties and applications from attack, as well as protecting the full suite of enterprise IP applications — including e-mail, file transfers, and VPN — across a data center.

Akamai says it provides solutions for defending Web sites and Web applications by leveraging the scale and intelligence of its global platform to protect against even the largest and most sophisticated DDoS and application-layer attacks. Prolexic combines DDoS mitigation solutions with security operations expertise for protecting data centers and enterprise IP applications.

By acquiring Prolexic, Akamai intends to provide customers with a comprehensive portfolio of security solutions designed to defend an enterprise’s Web and IP infrastructure against application-layer, network-layer and data center attacks delivered via the Internet.

“Any company doing business on the Internet faces an evolving threat landscape of attacks aimed at disrupting operations, defacing the brand, or attempting to steal sensitive data and information,” said Tom Leighton, CEO of Akamai. “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. We believe that Prolexic’s solutions and team will help us achieve our goal of making the Internet fast, reliable, and secure.”

“Today, business is defined by the availability, security and latency of Internet-facing applications, data and infrastructure,” said Scott Hammack, CEO at Prolexic. “Being able to rely on one provider for Internet performance and security greatly simplifies resolution of network availability issues and offers clients clear lines of accountability. We believe that, together, we will be able to deliver an unprecedented level of network visibility and protection.”

Under terms of the agreement, Akamai will acquire all of the outstanding equity of Prolexic in exchange for a net cash payment of approximately $370 million, after expected purchase price adjustments, plus the assumption of outstanding unvested options to purchase Prolexic stock.

The closing of the transaction, which is subject to customary closing conditions, including regulatory approvals, is expected to occur in the first half of 2014. Therefore, Akamai’s Q4 2013 existing guidance remains unchanged. The Prolexic acquisition is expected to be slightly dilutive to Akamai’s Non-GAAP net income per share in the first full year post closure in the range of $0.06 to $0.08. Once the acquisition closes, the company will include Prolexic in its guidance going forward.

Akamai hosted a conference call to discuss the acquisition of Prolexic yesterday, 2 December 2013. The company says that a live Webcast of the call may be accessed at www.akamai.com in the Investor section. In addition, a replay of the call will be available for two weeks following the conference through the Akamai Web site or by calling 1-888-286-8010 (or 1-617-801-6888 for international calls) and using conference ID No. 55460617.