Radware has purchased cloud DDoS network operator SecurityDAM for $30 million to accelerate the growth of its cloud security services business.
The Tel Aviv, Israel-based cybersecurity and application delivery provider has relied on Tel Aviv-based SecurityDAM to be the sole provider of scrubbing center services for Radware’s cloud DDoS protection service since 2014. Radware acquired SecurityDAM for $30 million with contingent payments of up to $12.5 million based on the performance of Radware’s cloud DDoS protection service after the deal.
“We are committed to providing our customers state-of-the-art, frictionless security so they can advance their digital strategies while ensuring their defenses don’t become roadblocks to change,” Radware President and CEO Roy Zisapel said in a statement. “The goal of our initiative is to innovate and scale faster so we can deliver our cloud security capabilities to even more customers.”
Radware’s stock is down $0.26 (0.81 percent) to $31.76 per share in midday trading. The SecurityDAM acquisition was announced before the market opened Thursday and is expected to boost Radware’s earnings on a non-GAAP basis in 2023. Radware executives weren’t immediately available for additional comment.
Services provided by SecurityDAM to Radware since 2014 have included diverting the traffic of an attacked customer site to a scrubbing center to mitigate the attack and addressing the licensing of software to control and monitor DDoS attacks. SecurityDAM provided $7.1 million, $10.2 million, and $11.5 million of services to Radware in 2019, 2020, and 2021, respectively, according to Radware.https://7d7d0656b1741ca2657ecdb5eb8f584d.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html
SecurityDAM was founded in 2012, employs 63 people, and hasn’t raised any outside funding, according to LinkedIn and Crunchbase. Radware Chairman Yehuda Zisapel holds a majority ownership stake in SecurityDAM, while Radware President and CEO Roy Zisapel has a minority stake in SecurityDAM. SecurityDAM has been led since October 2018 by former MobiliBuy CEO and Bringg COO Koby Danon.
Since both Yehuda and Roy Zisapel had an ownership stake in SecurityDAM, Radware said it formed a special committee consisting solely of independent board members to examine the SecurityDAM transaction and ultimately negotiate and approve its terms. The purchase agreement was unanimously recommended by the special committee and unanimously approved by disinterested board members.
Certain key employees of SecurityDAM entered into agreements with Radware where they pledged to not compete with Radware in the business that SecurityDAM conducted prior to closing for a set period of time. Outside of buying SecurityDAM, Radware said it plans to grow its innovation center in India and expand its cloud network footprint by boosting technology, operations, and headcount investments.
Specifically, Radware plans to expand its presence in Bangalore and Chennai, India to drive cybersecurity research and development and service delivery across the company’s cloud security portfolio, taking the company’s cloud security unit to nearly 300 engineers. The company plans to increase the cloud service capacity of its global delivery network and extend its footprint to address evolving business demand.
Radware additionally plans to improve its cloud security data center architecture to segregate between peacetime, always-on zones and mitigation and attack zones. This provides always-on attack detection for all customers while isolating organizations with high volume attacks to specific zones in the cloud network, so they don’t impact the broader group.
The SecurityDAM acquisition comes five months after CNBC reported that Radware is in talks to sell itself to private equity firm Siris Capital after being publicly traded on Nasdaq for nearly 22 years. Radware competes with companies like Akamai, Cloudflare, and F5 to protect corporate websites from targeted denial-of-service attacks from malicious actors.RELATED TOPICS:
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