Under the pact, F5 will buy Shape’s all issued and outstanding shares for $1 billion valuation in cash, subject to certain adjustments.
This key buyout will help F5 to speed up its growth and more than double the company’s addressable market in security.
The Santa Clara based Shape Security is a major player in fraud and abuse prevention and has been credited as the inventor of world’s first botwall in 2011.
Banks, airlines, retailers, and government agencies are among the key customers of Shape’s fraud and abuse defense technology.
In particular, Shape defends against credential stuffing attacks, where cybercriminals use stolen passwords from third-party data breaches to take over other online accounts.
Shape has built an advanced platform, utilizing artificial intelligence and machine learning, supported by powerful cloud-based analytics to protect against attacks that bypass other security and fraud controls.
With Shape’s buyout, F5 has strengthen its overall security portfolio and expertise across software applications and mutli-cloud environments. Shape’s fraud and abuse prevention capabilities will hugely help F5 in transforming application security.
“With Shape, we will deliver end-to-end application protection, which means revenue generating, brand-anchoring applications are protected from the point at which they are created through to the point where consumers interact with them—from code to customer,” said F5 President and CEO, François Locoh-Donou.
“Beyond opening a fast-growing $4 billion adjacent market, Shape’s machine learning and AI-powered capabilities will scale and extend F5’s broad portfolio of application services and expand our ability to optimize and protect customers’ applications in an increasingly complex multi-cloud world,” added Locoh-Donou.
“Since Shape’s inception, we observed a consistent pattern in customer after customer: the use of F5 technology to deliver and enable their applications,” said Derek Smith, Co-founder and CEO – Shape.
“Now, we look forward to the opportunity to deeply integrate into F5’s platform for application delivery and security—F5 provides the optimum traffic flow insertion point for Shape’s industry-leading online fraud and abuse prevention solutions,” added Smith.
“This, combined with F5’s global go-to-market scale, means we can jointly protect significantly more customers’ applications and users from sophisticated attacks and malicious traffic.” he further said.
Upon closing of the acquisition, Derek Smith, and the leadership team will join F5 in key management roles. Shape will remain located in their current Santa Clara headquarters.
The Shape acquisition is consistent with F5’s vision to build the best end-to-end multi-cloud application services company. It propels F5’s product and total revenue growth; speeds F5’s transition to a software- and SaaS-driven business model; and is expected to meaningfully increase F5’s software subscription mix in fiscal year 2020.
Foros and JP Morgan acted as financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP provided legal counsel to F5 on this transaction. Qatalyst Partners acted as financial advisor and Sidley Austin LLP provided legal counsel to Shape.
(Image credit – TAdviser)