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F5 to acquire NGINX
Posted on Wednesday, 13 March 2019 10:26
Multi-cloud application services provider F5 Networks has reached an agreement to acquire an open source leader in application delivery, NGINX, for USD 670.00 million, subject to adjustments.

The Nasdaq-listed buyer believes the transaction is a strategic and organic investment that will secure long-term revenue and (EPS) growth.

NGINX partners with leading businesses such as Amazon Web Services, Google Cloud Platform, IBM and Microsoft Azure and is trusted by more than 400.00 million sites that use its technologies for developing and delivering modern applications.

The firm enables enterprises undergoing digital transformation to modernise legacy and deliver new microservices-based platforms.

Companies such as Netflix, Starbucks and McDonald’s each rely on NGINX to reduce costs, improve resiliency and speed innovation.

The group raised USD 43.00 million in June last year in a series C round of funding from e.ventures and Goldman Sachs.

F5, whose shares fell 7.7 per cent to USD 149.65 yesterday, said that together the two groups will enable multi-cloud application services across all environments.

François Locoh-Donou, chief executive of the acquiror, said: “F5’s acquisition of NGINX strengthens our growth trajectory by accelerating our software and multi-cloud transformation.”

The deal will increase the buyer’s software revenue growth in 2019 by between 35.0 and 40.0 per cent, with low single-digit expansion in non-generally accepted accounting principles EPS.

F5 will finance the transaction through cash on its balance sheet and is suspending its common stock share repurchase programme.

It said that it will continue to evaluate market conditions, including capital requirements in determining when and whether to continue such programmes.

Subject to regulatory approvals and having already received the green light from both boards and shareholders, the deal is expected to close in the second quarter of 2019.

According to Zephyr, the M&A database published by Bureau van Dijk, this is F5’s largest acquisition on record.

© Zephus Ltd