F5 to acquire Shape Security for nearly US$1B

F5 Networks is to acquire cyber fraud detection specialist Shape Security for almost US$1 billion in cash.

The security powerhouse expects to close the deal in the first calendar quarter of 2020 and claimed it would break even within two years.

Headquartered in California, Shape’s speciality is a fraud prevention platform that uses artificial intelligence and cloud-based analytics to defend against criminal transactions.

Locally, Shape has a two-person Asia Pacific office in Sydney, which is overseen by country director Marc Brown and is partnered with Google Cloud in Australia.

According to F5, the acquisition brings together its own expertise in protecting applications across multi-cloud environments with Shape’s abuse prevention capabilities.

“Together F5 and Shape offer organisations comprehensive, end-to-end application security, potentially saving billions of dollars lost to fraud, reputational damage, and costly disruptions to critical online services,” it said in a statement.

The deal comes just months after F5 Networks acquired Telstra-backed web server Nginx in a deal valued at US$670 million.

Shape’s leadership, including co-founder and CEO Derek Smith, is said to be joining F5’s management team.

“Since Shape’s inception, we observed a consistent pattern in customer after customer: the use of F5 technology to deliver and enable their applications,” said Smith.

“Now, we look forward to the opportunity to deeply integrate into F5’s platform for application delivery and security— F5 provides the optimum traffic flow insertion point for Shape’s industry-leading online fraud and abuse prevention solutions.”

Smith also cited F5’s “go-to-market” scale as enabling them to jointly protect significantly more customers’ applications.

The deal will also speed up F5’s transition to a software- and SaaS-driven business mode, increasing its software subscription mix in FY 2020, the vendor added.