F5 Networks plans to acquire Boston-based cloud monitoring company Threat Stack for $68 million.
The acquisition agreement, announced Monday morning, is the latest in a string of deals for the Seattle-based application security and delivery company, which has spent more than $2 billion to absorb a variety of cloud and security software ventures in the last three years.
The purchase price is less than the total of $70 million that Threat Stack raised across six funding rounds over the past decade, and about 40% of the $172 million post-money valuation in its most recent financing, a $45 million debt-and-equity round led by F-Prime Capital and Eight Roads on the equity side, according to Seattle-based venture capital database PitchBook.
Threat Stack offers software used by companies to monitor, detect, and respond to security and compliance risks, using machine learning as part of the process.
Its focus plays into F5’s longstanding effort to expand beyond its traditional networking hardware business under CEO François Locoh-Donou. F5 is moving further into software and services, pursuing a vision for adaptive applications.
“A core tenet of adaptive applications is their capacity to protect themselves by detecting and mitigating threats in real time,” F5 said in its news release announcing the deal. “Threat Stack’s proactive risk identification and real-time threat detection combined with the breadth of F5’s application insights and controls will accelerate the delivery of this capability for our customers.”
The acquisition is expected to close in the December quarter. Threat Stack has about 140 employees, according to its website. CEO Brian Ahern is expected to join F5 as part of the deal. More details on integration plans are expected to be announced when the deal is complete.
F5, headquartered in a new downtown Seattle skyscraper, employs a total of 6,380 people worldwide, including more than 1,400 in the Seattle region.
Shares of F5 are down about 2% in trading on the NASDAQ following the news.
F5 announced a $670 million deal for Nginx, the company behind the widely-used web and application server technology, in March 2019; and completed its $1 billion purchase of Shape Security in January 2020. It acquired cloud computing company Volterra for $500 million in January of this year.