F5 Networks to acquire NGINX

The $670 million deal is about enabling multi-cloud services across environments.

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F5 Networks on Monday announced that it will acquire NGINX, which provides popular open-source software of the same name, for $670 million. The deal advances F5's aim of capitalizing on the trend toward multi-cloud deployments.

F5 plans to enhance NGINX's current offerings with F5 security solutions and will integrate F5 cloud-native technology with NGINX's software load balancing technology. This should accelerate F5's time to market of application services for containerized applications. Meanwhile, NGINX will benefit from F5's global salesforce, channel infrastructure and partner ecosystem.

The acquisition adds "the power of NGINX's open source innovation to F5's ADC leadership and enterprise reach," NGINX CEO Gus Robertson said in a statement. "F5 gains depth with solutions designed for DevOps, while NGINX gains breadth with access to tens of thousands of customers and partners." 

F5 says it is committed to increasing investment in the NGINX open source project and to maintaining the NGINX brand. NGINX's thriving open source community was "one of the most attractive elements of this combination," F5 said in a release. The company expects the deal to accelerate its product integrations with leading open source projects and enhance its technology partnerships with open source vendors.

Once the deal closes, Robertson, along with NGINX founders Igor Sysoev and Maxim Konovalov, will join F5 and will continue to lead NGINX. F5 will maintain NGINX's operations in San Francisco and other locations globally.

F5 has been developing a more robust multi-cloud strategy, with support for applications in both private and public environments. F5 expects the acquisition to increase its software revenue growth and increase its software revenue mix in fiscal year 2019. By fiscal year 2021 to fiscal year 2022, it expects the deal to help F5 reach its objectives of mid-to-high single-digit revenue and double-digit non-GAAP earnings per share growth.

"By bringing F5's world-class application security and rich application services portfolio for improving performance, availability, and management together with NGINX's leading software application delivery and API management solutions, unparalleled credibility and brand recognition in the DevOps community, and massive open source user base, we bridge the divide between NetOps and DevOps with consistent application services across an enterprise's multi-cloud environment," F5 CEO François Locoh-Donou said in a statement.

The acquisition has been approved by the boards of directors of both F5 and NGINX and is expected to close in the second calendar quarter of 2019.

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