Dec 2 Akamai Technologies Inc said it
will spend about $370 million to acquire Prolexic Technologies
Inc, a pioneer in fighting distributed denial of service
attacks, cyberthreats that cripple networks by overwhelming them
with Internet traffic.
The move will bolster Akamai's security offerings, which
already include some services for protecting websites against
the distributed denial of service (DDoS) attacks.
DDoS attacks are among the most common types of Internet
threats. Criminals use them in extortion attempts, hacker
activists launch them to make political statements and
governments use them in military operations.
High-profile DDoS attacks in recent years include a campaign
launched last year against U.S. banks that has been linked to
Iran along with ongoing assaults organized by Anonymous, a
loosely knit collective of hacker activists.
Akamai said the deal is expected to reduce its adjusted
profit by 6-8 cents per share in the first full year after
closing. Analysts on average expect Akamai to earn $2.16 per
share in 2014, according to Thomson Reuters I/B/E/S.
Akamai CEO Tom Leighton said on a conference call that he
expects the deal will boost profits over the long term.
"As we integrate the companies, we are very confident that
we can grow and scale the business to drive significant profit
growth over the longer term as the business and market
opportunity grows," he said.
Prolexic, founded in 2003, says its customers include 10 of
the world's biggest banks along with energy firms, gaming sites,
government agencies, healthcare companies and retailers.
Its biggest competitors include telecommunications firms,
such as AT&T Inc and Verizon Communications Inc.
Prolexic's investors include Camden Partners, Trident Capital
and Intel Capital.
Akamai's core business is speeding delivery of web content
for firms including Apple Inc, Facebook Inc,
Netflix Inc, News Corp and Nintendo Co
through more than 141,000 servers located around the
globe. Over the past few years it has added security products in
a bid to expand offerings to existing clients and boost revenue.
Akamai said it expects the acquisition to close in the first
half of 2014.