Akamai acquires Guardicore to expand its zero trust security portfolio

Akamai Technologies announced it has entered into a definitive agreement to acquire Tel Aviv, Israel-based Guardicore. By adding Guardicore’s micro-segmentation solution into Akamai’s extensive zero trust security portfolio, Akamai will be uniquely suited to provide comprehensive protections to the enterprise, defending against threat actors and the spread of malware and ransomware.

Guardicore’s micro-segmentation solution is designed to limit user access to only those applications that are authorized to communicate with each other. By denying communication as the default, the threat surface and risk exposure are drastically reduced, thereby limiting the spread of malware and protecting the flow of enterprise data across the network. This protection extends beyond the data center to the cloud, including bare metal, virtual machines and containers.

Akamai currently offers a broad suite of zero trust security solutions, including Web Application Firewall (WAF), Zero Trust Network Access (ZTNA), Domain Name System (DNS) Firewall, and Secure Web Gateway (SWG), that help prevent attackers and malware on employee devices from gaining access to enterprise infrastructure and applications. But to be secure in today’s world, enterprises also need a second layer of defense to block the spread of malware after it has gained a foothold within the corporate infrastructure.

Guardicore’s micro-segmentation solution provides this much-needed capability, substantially mitigating the impact of breaches and the threat posed by ransomware. Their solution enables deep visibility into application flows, across data center and cloud applications, allowing businesses to more granularly understand and protect their infrastructure, from the core of the enterprise to the cloud. As a result, breaches can be detected early on so that corrective actions can be taken as quickly as possible.

“Given the recent surge in ransomware attacks and increasingly stringent compliance regulations, investing in technologies to reduce the spread of malware has become mission critical,” said Tom Leighton, chief executive officer and co-founder, Akamai Technologies. “By adding Guardicore’s leading micro-segmentation products to Akamai’s comprehensive portfolio of zero trust solutions, we believe Akamai will be able to provide the most effective way to combat ransomware on the market today.”

“Guardicore’s mission is to protect enterprises from damage caused by breaches, like ransomware, while safeguarding the critical assets at the heart of the network,” said Pavel Gurvich, co-founder and chief executive officer, Guardicore. “The customer is able to reduce risk in a holistic way across all products, managing from a single console, versus many products and machines. My team and I greatly look forward to joining Akamai to protect the user and the enterprise — no matter what the user is doing or where end users and workloads are located.”

Under terms of the agreement, Akamai has agreed to acquire all of the outstanding equity of Guardicore for approximately $600 million, after giving effect to expected purchase price adjustments. The closing of the transaction, which is subject to customary closing conditions, is expected to occur in the fourth quarter of 2021.

For fiscal year 2022, the Guardicore acquisition is anticipated to provide about $30-35 million in revenue, and Akamai’s non-GAAP operating margin is anticipated to be in the range of approximately 29-30%. The company’s non-GAAP operating margin is expected to return to at least 30% for fiscal year 2023. On its next quarterly call currently scheduled for November 2, 2021, the company plans to provide third quarter 2021 financial results and full year 2021 financial guidance including any expected impact from Guardicore.

Morgan Stanley & Co. LLC served as financial advisor to Akamai on the transaction.