Akamai to Buy Cybersecurity Firm Prolexic for $370 Million

Prolexic's Business is in Technology That Thwarts Distributed Denial of Service Attacks

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Deal will help Akamai provide a fuller portfolio of security services to protect customers from attacks on every level of the Internet.

By Ben Fox Rubin, Drew FitzGerald

Akamai Technologies Inc. agreed to buy Prolexic Technologies Inc. for about $370 million in cash, expanding its cybersecurity offerings.
Prolexic specializes in technology that guards data centers against distributed denial of service attacks, an increasingly common threat that can shut down a website by flooding its address with fake information requests. Akamai Chief Executive Tom Leighton said such attacks often overwhelm otherwise strong technology because the onslaughts are becoming bigger and less predictable.
“Scale has really been a killer for the traditional ways of defending a website,” Mr. Leighton said in an interview. “You need to stop the attack traffic close to where it’s coming from before it even gets to the data center.”
Rising demand for online content continues to drive revenue growth at Akamai, which runs a network of servers and other equipment that speed delivery of Internet content. Akamai has reported double-digit sales growth in recent years, and results in recent quarters often beat its own expectations as well as Wall Street estimates.
The company said the new Prolexic deal will help it provide a fuller portfolio of security services that can protect customers from attacks on every level of the Internet. The deal is expected to close in the first half of next year, so Akamai’s current fourth-quarter guidance remains unchanged. The acquisition is expected to be slightly dilutive to Akamai’s adjusted per-share income in the first full year after the deal is completed in the range of six cents to eight cents.
Akamai’s shares are up 8.1% so far this year.