Akamai buys Israeli cybersecurity co Guardicore for $600m

Guardicore founders Photo: PR

The Tel Aviv-based company, which has raised $110 million, prevents cyberattacks through network segmentation.

US company Akamai Technologies (Nasdaq: AKAM) has announced that it has acquired Israeli cybersecurity company Guardicore for $600 million. This is a nearly six-fold return for investors in the company, which has raised $110 million since it was founded eight years ago by CEO Pavel Gurvich and Ariel Zeitlin and Dror Sal'ee. Initial investors include former Israeli prime minister Ehud Barak (who has since sold all his shares), North83 and Battery Ventures, while other investors include Qumra Capital, Greenfield, ClalTech, Deutsche Telekom, Dell, Cisco and Greylock.

Guardicore has developed a platform for preventing ransomware and other cyberattacks in real time. The Tel Aviv-based company operates in the relatively well-established market of protecting enterprises by dividing an organization into impenetrable 'secured cells,' (network segmentation).

Gurvich said, "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. 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." 

Akamai CEO Tom Leighton said, "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.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." 

Akamai said that 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. 

This is Akamai's third and largest acquisition in Israel. In 2011, Akamai acquired contewnt distribution company Cotendo for $300 million and in 2019 Akamai acquired website protection company ChameleonX for $20 million.

Published by Globes, Israel business news - en.globes.co.il - on September 29, 2021

Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Guardicore founders Photo: PR
Guardicore founders Photo: PR
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