Seeking Alpha

Akamai acquiring cloud denial-of-service security firm for $370M

  • Akamai (AKAM) is acquiring Prolexic, a provider of cloud-based services for protecting companies and data centers from distributed denial-of-service (DDoS) attacks, for $370M in cash. (PR)
  • The deal is expected to close in 1H14, and to dilute Akamai's EPS in "the first full year post closure" by $0.06-$0.08.
  • Akamai declares the combination of its existing security offerings (backed up by a giant CDN that can offload traffic from a data center facing a DDoS attack) with Prolexic's services will allow it to offer "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."
  • The high-margin security services market has increasingly been a priority for Akamai. Earlier this year, the company launched Kona Site Defender, its own solution for dealing with DDoS and other hacking attacks.
  • AKAM -1.6% premarket.
  • Previous: The Velocius Networks acquisition
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