Akamai to Acquire Prolexic

December 02, 2013


Jeff Young
Media Relations


Tom Barth
Investor Relations


  • Akamai aims to extend its leading Web optimization and security offerings by adding cloud-based security solutions for protecting data centers and enterprise applications
  • Akamai to host related conference call today, December 2nd at 8:45 a.m. ET.

CAMBRIDGE, MA and HOLLYWOOD, FL – (December 2, 2013) – Akamai Technologies, Inc. (NASDAQ: AKAM) and Prolexic Technologies, Inc. announced today that the two companies have signed a definitive agreement for Akamai to acquire Prolexic, a provider of cloud-based security solutions for protecting data centers and enterprise IP applications from distributed denial of service (DDoS) attacks.

Faced with an ever-changing threat landscape, organizations require comprehensive security solutions that address many different protection scenarios. These include securing mission critical Web properties and applications from attack, as well as protecting the full suite of enterprise IP applications – including email, file transfers, and VPN – across a data center.

Akamai provides leading solutions for defending Web sites and Web applications by leveraging the scale and intelligence of its global platform to protect against even the largest and most sophisticated DDoS and application-layer attacks. Prolexic combines DDoS mitigation solutions with security operations expertise for protecting data centers and enterprise IP applications.

By acquiring Prolexic, Akamai intends to provide customers with a comprehensive portfolio of security solutions designed to defend an enterprise’s Web and IP infrastructure against application-layer, network-layer and data center attacks delivered via the Internet.

“Any company doing business on the Internet faces an evolving threat landscape of attacks aimed at disrupting operations, defacing the brand, or attempting to steal sensitive data and information,” said Tom Leighton, CEO of Akamai. “By joining forces with Prolexic, we intend to combine Akamai’s leading security and performance platform with Prolexic’s highly-regarded DDoS mitigation solutions for data center and enterprise applications protection. We believe that Prolexic’s solutions and team will help us achieve our goal of making the Internet fast, reliable, and secure.”

“Today, business is defined by the availability, security and latency of Internet-facing applications, data and infrastructure,” said Scott Hammack, CEO at Prolexic. “Being able to rely on one provider for Internet performance and security greatly simplifies resolution of network availability issues and offers clients clear lines of accountability. We believe that, together, we will be able to deliver an unprecedented level of network visibility and protection.”

Under terms of the agreement, Akamai will acquire all of the outstanding equity of Prolexic in exchange for a net cash payment of approximately $370 million, after expected purchase price adjustments, plus the assumption of outstanding unvested options to purchase Prolexic stock. The closing of the transaction, which is subject to customary closing conditions, including regulatory approvals, is expected to occur in the first half of 2014. Therefore, Akamai’s Q4 2013 existing guidance remains unchanged. The Prolexic acquisition is expected to be slightly dilutive to Akamai’s Non-GAAP net income per share in the first full year post closure in the range of $0.06 to $0.08. Once the acquisition closes, the Company will include Prolexic in its guidance going forward.

Conference call scheduled today, Monday, December 2 at 8:45 a.m. ET

Akamai will host a conference call to discuss the acquisition of Prolexic today, December 2, 2013, at 8:45 a.m. Eastern time. The call may include forward-looking financial guidance from management. The call can be accessed through 1-800-706-7749 (or 1-617-614-3474 for international calls) using conference ID No. 19279933. A live Webcast of the call may be accessed at in the Investor section. In addition, a replay of the call will be available for two weeks following the conference through the Akamai Website or by calling 1-888-286-8010 (or 1-617-801-6888 for international calls) and using conference ID No. 55460617.

Use of Non-GAAP Financial Measures

In addition to providing financial measurements based on generally accepted accounting principles in the United States of America (GAAP), Akamai provides additional financial metrics that are not prepared in accordance with GAAP (non-GAAP). Management uses non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes and to evaluate Akamai’s financial performance. The non-GAAP financial measures included in this press release are Adjusted EBITDA margin and non-GAAP net income per share.

Management believes that the use of non-GAAP financial measures allows for meaningful comparisons and analysis of trends in the business, as they exclude expenses and gains that may be infrequent, unusual in nature and not reflective of Akamai’s ongoing operating results. Management also believes that non-GAAP financial measures provide useful information to investors in understanding and evaluating Akamai’s operating results and future prospects in the same manner as used by management and in comparing financial results across accounting periods and to those of peer companies.

The non-GAAP financial measures do not replace the presentation of Akamai’s GAAP financial results and should only be used as a supplement to, not as a substitute for, Akamai’s financial results presented in accordance with GAAP. Akamai has not provided a reconciliation of each non-GAAP financial measure used in this press release to the most directly comparable GAAP financial measure because it is not practicable to do so at this time.

Akamai’s definitions of the non-GAAP financial measures used in this press release are outlined below:

  • Non-GAAP net income – GAAP net income adjusted for the following tax-effected items: amortization of acquired intangible assets; stock-based compensation; amortization of capitalized stock-based compensation; restructuring charges; acquisition related costs; certain gains and losses on investments; gains and other activity related to divestiture of a business; loss on early extinguishment of debt; gains and losses on legal settlements and other non-recurring or unusual items that may arise from time to time.
  • Non-GAAP net income per share – Non-GAAP net income divided by the basic weighted average or diluted common shares outstanding used in GAAP net income per share calculations.
  • Adjusted EBITDA – GAAP net income excluding the following items: interest; income taxes; depreciation and amortization of tangible and intangible assets; stock-based compensation; amortization of capitalized stock-based compensation; restructuring charges; acquisition related costs; certain gains and losses on investments; gains, losses and other activity related to divestiture of a business; foreign exchange gains and losses; loss on early extinguishment of debt; gains and losses on legal settlements and other non-recurring or unusual items that may arise from time to time.
  • Adjusted EBITDA margin – Adjusted EBITDA stated as a percentage of revenue.

The non-GAAP adjustments, and Akamai’s basis for excluding them from non-GAAP financial measures, are outlined below:

  • Amortization of acquired intangible assets – Akamai has incurred amortization of intangible assets, included in its GAAP financial statements, related to various acquisitions the Company has made. The amount of an acquisition’s purchase price allocated to intangible assets and term of its related amortization can vary significantly and are unique to each acquisition. Therefore, Akamai excludes amortization of acquired intangible assets to provide investors with a consistent basis for comparing pre- and post-acquisition operating results.
  • Stock-based compensation and amortization of capitalized stock-based compensation – Although stock-based compensation is an important aspect of the compensation to Akamai’s employees and executives, the expense varies with changes in the stock price and market conditions at the time of grant, varying valuation methodologies, subjective assumptions and the variety of award types. This makes the comparison of Akamai’s current financial results to previous and future periods difficult to interpret. Therefore, Akamai believes it is useful to exclude stock-based compensation and amortization of capitalized stock-based compensation in order to better understand the performance of Akamai’s core business performance and to be consistent with the way the investors evaluate its performance and comparison of its operating results to peer companies.
  • Restructuring charges – Akamai has incurred restructuring charges, included in its GAAP financial statements, primarily due to workforce reductions and estimated costs of exiting facility lease commitments. Akamai excludes these items when evaluating its continuing business performance as such items are not consistently recurring, do not reflect expected future operating expense, nor provide meaningful insight into the current and past operations of its business.
  • Acquisition related costs – Acquisition related costs include transaction fees, due diligence costs and other one-time direct costs associated with strategic activities. In addition, subsequent adjustments to the Company’s initial estimated amount of contingent consideration associated with specific acquisitions are included within acquisition related costs. These amounts are impacted by the timing and size of the acquisitions. Akamai excludes acquisition related costs and benefits to provide a useful comparison of the Company’s operating results to prior periods and to its peer companies because such amounts vary significantly based on magnitude of its acquisition transactions.
  • Gain and other activity related to divestiture of a business – Akamai recognized a gain and other activity associated with the divestiture of its Advertising Decision Solutions business. Akamai excludes gains and other activity related to divestiture of a business because sales of this nature occur infrequently and are not considered part of the Company’s core business operations.
  • Income tax-effect of non-GAAP adjustments – The non-GAAP adjustments described above are reported on a pre-tax basis. The income tax effect of non-GAAP adjustments is the difference between GAAP and non-GAAP income tax expense. Non-GAAP income tax expense is computed on non-GAAP pre-tax income (GAAP pre-tax income adjusted for non-GAAP adjustments) and excludes certain discrete tax items (such as recording or release of valuation allowances), if any. Akamai believes that applying the non-GAAP adjustments and their related income tax effect allows the Company to more properly reflect the income attributable to its core operations.

About Prolexic

Prolexic is one of the largest, most trusted Distributed Denial of Service (DDoS) mitigation providers in the world. Designed to absorb large and complex attacks, Prolexic aims to restore mission-critical Internet-facing infrastructures for global enterprises and government agencies within minutes. Some of the world’s largest banks and the leading companies in e-Commerce, SaaS, payment processing, travel/hospitality, gaming, energy and other at-risk industries rely on Prolexic to protect their businesses. Founded in 2003 as a leading cloud DDoS mitigation platform, Prolexic is headquartered in Hollywood, Florida, and has scrubbing centers located in the Americas, Europe and Asia. To learn more about Prolexic, please visit and @Prolexic on Twitter.

About Akamai

Akamai® is the leading provider of cloud services for delivering, optimizing and securing online content and business applications. At the core of the Company’s solutions is the Akamai Intelligent Platform™ providing extensive reach, coupled with unmatched reliability, security, visibility and expertise. Akamai removes the complexities of connecting the increasingly mobile world, supporting 24/7 consumer demand, and enabling enterprises to securely leverage the cloud. To learn more about how Akamai is accelerating the pace of innovation in a hyperconnected world, please visit or and follow @Akamai on Twitter.


The release contains information about future expectations, plans and prospects of Akamai’s management that constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995, including statements about expected benefits to Akamai from the acquisition. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including, but not limited to, inability to successfully integrate the technology and personnel of Prolexic, failure to achieve expected post-closing margins or revenue contributions, inability to develop products based on the technology, failure of the parties to secure regulatory approvals of the transaction, and other factors that are discussed in the Company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q, and other documents periodically filed with the SEC.

In addition, the statements in this press release or conference call represent Akamai’s expectations and beliefs as of the date of this press release. Akamai anticipates that subsequent events and developments may cause these expectations and beliefs to change. However, while Akamai may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Akamai’s expectations or beliefs as of any date subsequent to the date of this press release.

Customer Spotlight
  • Alliant Credit Union

    Prolexic DDoS protection keeps more than 50,000 daily users online

  • Fragrance and Beauty Products Retailer

    A DDoS attack takes down this popular site for 24 hours. Prolexic restores in 5 minutes.

  • Leading Online Jewelry Retailer

    A DDoS attack took down the site of a premier jewelry retailer for nearly three days.

  • Online Options Trading

    Financial services firm avoids extortion attempt. Prolexic keeps web site up during vicious Layer 7 attack.

  • e-Commerce Startup

    When others couldn't mitigate the latest DDoS attack, a "daily deal" web site called Prolexic: problem solved in 2 hours.

  • A Leading Content Rating Organization

    A 9 million packets per second DDoS attack brings down web site before Prolexic steps in.

  • Spa and Wellness Firm

    Prolexic quickly stops a combination Layer 4 and 7 DDoS attack after a host's mitigation capabilities falls short.

  • Foundation Management

    Prolexic mitigates GET flood in minutes for new client after Sunday night emergency call.

  • Web site building and hosting services firm

    Prolexic mitigates Layer 4 UDP flood peaking at 6.2 Gbps. Protects 6 million Yolasites.

  • Online Movie Subscription Service

    After seeing all traffic route to Prolexic, hackers pull the plug on DDoS attack.

  • IPG Holdings Limited

    Prolexic mitigates Layer 7 GET floods targeting payment processing platform.


    Prolexic mitigates politically motivated attacks against web hosting company's clients.

  • Financial Services Firm Global eSolutions

    Prolexic mitigates Layer 3, 4 and 7 attacks against Forex trading platform.

  • Krebs on Security

    Prolexic fends off Pandora DNS amplification attacks for popular cyber security blog.

  • e-Commerce Provider of Printed Promotion Items

    Prolexic mitigates two-week Layer 7 DDoS attack campaign.

  • Global Blogging Site

    Prolexic protects freedom of speech for 30 million users targeted by six-month political DDoS campaign.

  • Online Credit Card Site

    Prolexic mitigates Layer 4 DDoS attacks against Ixaris site,

  • e-Commerce Web Site

    Prolexic mitigates 25-40 Gbps Layer 3 DDoS attacks against online auto parts retailer.

  • Timepieces e-Commerce Site

    Prolexic keeps World of Watches ticking after DDoS attack flood site.

  • PayPro Global

    Prolexic mitigates 16-hour Layer 7 DDoS attack on software distribution site.

  • Henyep Capital Markets

    Prolexic keeps Henyep accessible and trading through multiple SYN, GET and ICMP flood attacks.

  • Australia’s #1 Job Search Website

    Prolexic keeps online and incident-free for millions of job seekers.

  • e-Commerce Hosting Provider for Top Tier Sites

    Prolexic keeps and its customers generating revenue

  • Customer ROI requires online accessibility and reliability

    Prolexic ensures Clickpoint! Media's online services are available and incident-free

  • University Federal Credit Union

    Prolexic's mitigation services now protect credit union with US$1.6 Billion in assets


    Prolexic mitigates 70 Gbps SYN flood DDoS attack for popular ink retailer

  • Arab National Bank

    Builds strong DDoS defense to serve online banking customers and e-trade site

  • OnCourse Systems for Education

    Prolexic succeeded where two other mitigation firms failed

  • Threat: Joomla Reflection DDoS-for-Hire

    Compromised Joomla servers used for DDoS GET floods

  • Frost & Sullivan Stratecast Report

    “Going to the Edge with Security”

  • Threat: MS SQL Reflection Attacks

    DDoS attack abuses MC-SQLR in SQL Server instances

  • Q4 2014 State of the Internet - Security Report

    Number of DDoS attacks nearly doubles in a year