Akamai (NASDAQ:AKAM, news, filings) made a substantial inorganic move today, announcing an agreement to acquire Florida-based Prolexic Technologies for about $370M in cash plus the assumption of outstanding unvested options. Prolexic offers cloud-based distributed denial of service (DDoS) protection for data centers and enterprise IP applications.
Of course, Akamai already offers security services in various forms along with its CDN and other performance services, and their state of the internet reports even explicitly look at the global threat universe. Prolexic’s product set simply gives them a more complete solution set to address DDoS threats at the data center and IP application levels.
Consolidation within and around the edges of the cloud revolution is going to be an ongoing theme for a while. Akamai has been remolding itself for several years now, taking its dominant position in the CDN world and using it to expand to a wider array of related cloud-based managed services. No doubt Akamai is looking at other M&A possibilities aimed at adjacent technologies and services.
The deal is expected to close in the first half of next year, and will cost Akamai’s earnings in the range $0.06-0.08 per share in the first full year after the close. That’s not a big bite however, and it’s the longer term they’re looking at.
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