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Cloud security company Threat Stack acquired by F5 for $68 million

Cloud security company Threat Stack acquired by F5 for $68 million

F5 Networks, one of the world’s largest providers of enterprise networking gear, announced on Monday that it is acquiring cloud security company Threat Stack for $68 million.

F5 said it was eager to meld its application and API protection tools with Threat Stack’s cloud security solutions to “enhance visibility across application infrastructure and workloads.”

Haiyan Song, executive vice president of Security at F5, said Threat Stack brings technology and talent “that will strengthen F5’s security capabilities” and further the company’s adaptive applications vision with broader cloud observability and actionable security insights for customers.

“Applications are the backbone of today’s modern businesses, and protecting them is mission-critical for our customers,” Song said. 

In a statement, F5 said it would be acquiring all issued and outstanding shares of the Boston-based Threat Stack and noted that the $68 million purchase would be financed with balance sheet cash.

F5 expects to deliver revenue in the range of $660 million to $680 million for the current quarter and said the new acquisition will add about $15 million in revenue for the fiscal year 2022, with no change to F5’s previously stated operating margin targets for the fiscal year 2022.

The deal is expected to be finalized in F5’s first-quarter fiscal year 2022, ending December 31, 2021.

In January, the company spent half a billion dollars to acquire Volterra, a maker of distributed multi-cloud application security and load-balancing software.

F5 noted that attacks targeting applications are now costing businesses $100 billion per year, prompting the need for improved security around the environments where they are distributed. 

“A core tenet of adaptive applications is their capacity to protect themselves by detecting and mitigating threats in real-time. 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,” F5 explained.