F5 Networks Inks Deal to Acquire Threat Stack

Multi-cloud application security and delivery company F5 Networks, Inc. (FFIV) has inked a deal to buy Threat Stack, a cloud security and workload protection company. Shares of the company slipped 1.4% to close at $201.78 on Monday.

The combination of F5’s cloud-native application and application programming interface (API) protection solutions with Threat Stack’s real-time threat detection platform will enable customers to ensure consistent security on the cloud and enhanced visibility across application infrastructure and workloads. (See F5 Networks stock charts on TipRanks)

With digital transformation at its peak, more and more companies are turning to the cloud for their day-to-day workload management. This makes the cloud and the applications that run on it potential entry points for cybercriminals. The need for visibility and identifying threats and neutralizing them has gained momentum due to the continuous challenges posed by hackers.

Commenting on the deal, Haiyan Song, the EVP of Security at FFIV, said, “Applications are the backbone of today’s modern businesses, and protecting them is mission-critical for our customers… Threat Stack brings technology and talent that will strengthen F5’s security capabilities and further our adaptive applications vision with broader cloud observability and actionable security insights for customers.”

As per the terms of the deal, F5 will acquire all the shares of privately-held Threat Stack for $68 million in cash. The deal, which is subject to certain closing conditions, is likely to conclude in F5’s first quarter of Fiscal Year 2022. Threat Stack will add approximately $15 million in revenue to F5’s Fiscal Year 2022. This, however, is not expected to have any impact on F5’s operating margin outlook.

Recently, Colliers Securities analyst Catharine Trebnick reiterated a Buy rating on the stock with a price target of $245, implying 21.4% upside potential to current levels.

Overall, the stock commands a Strong Buy consensus rating based on 8 Buys and 2 Holds. The average F5 Networks price target of $244.50 implies 21.2% upside potential to current levels. Shares have gained 71.3% over the past year.