F5 Networks on Monday announced that it will acquire Shape Security, a privately-held application security company, for approximately $1 billion in cash. The deal is expected to close in the first calendar quarter of 2020.
Shape's platform, which uses AI and cloud-based analytics, protects businesses from credential-stuffing attacks and other attacks that can bypass other security and fraud controls. Its customers include large banks airlines, retailers, and government agencies.
F5 plans to integrate Shape's capabilities into its portfolio of application security services, which specialize in protecting applications across multi-cloud environments. F5 provides an ideal traffic flow insertion point for Shape's online fraud and abuse prevention solutions, the companies said.
The deal follows F5's acquisition of NGINX earlier this year.
"Our long-standing belief that applications are the most valuable assets of any organization in the digital age has been the foundation of our strategy to become the leader in Multi-Cloud Application Services," F5 President and CEO François Locoh-Donou said in a letter to F5 employees. "When you combine F5 and NGINX's expertise powering over half of the world's applications across all types of environments, with Shape's insight from mitigating 1 billion application attacks per day, you have a company that knows how to secure more applications – and more value – than any company in the industry."
The deal is expected to accelerate F5's product and total revenue growth, speed up its transition to a software- and SaaS-driven business model and meaningfully increase F5's software subscription mix in FY 2020.
Shape's leadership team, including co-founder and CEO Derek Smith, are expected to join F5 in key management roles once the deal closes.