Exit for Guardicore: Akamai will acquire the Israeli company for $ 600 million in cash

Successful exit for the Israeli cyber company Guardicore: The American company Akamai has announced that it will acquire the Israeli company in a $ 600 million cash transaction and integrate its security solution into its Zero Trust basket of solutions. The closure of the transaction, which is subject to acceptable closing conditions, is expected to occur in the fourth quarter of 2021.
To the purchase amount will be added the cash in the Guardicor fund, which will be divided among the shareholders and employees, as well as an additional amount that will be used as a package for employee retention. Following the acquisition, Guardicor will join Akmai's local development center and integrate its micro-segmentation solution into the basket of solutions offered by Akmai.
Akmai, which is traded on Nasdaq, is a global provider of network, security and cloud services. Last June, its CEO, Tom Layton, told CNBC that security was an important growth engine for the company and accounted for 37% of its revenue in the first quarter of this year. "A zero trust of security model must be adopted," he stressed in the same interview.
Akmai is an American company that is traded on the NASDAQ at a value of about $ 17 billion, and deals with information security solutions, cloud services and content transfer (CDN).
Guardicor operates in the field of segmentation of communication networks, so that each unit within the organization lives separately and the attacker will not be able to move from computer to computer unhindered. Earlier this year, CEO and co-founder Pavel Gurevitz explained in an interview with TheMarker: “I liken it to submarine protection. It is built piece by piece so that one black person will not drown it. The engine room is separated from the residence and so on. We build segments within the IT system. Today, every organization is a submarine that someone is trying to sink. We divide it into sub-networks that limit the damage. "The company does this process using a software-only solution, replacing the more traditional firewall-based" box "solutions, which specialize in companies like Checkpoint, Palo Alto, Fortint and Cisco.
Gardicor's solution makes it possible to implement a cyber access known as the Zero Trust Network, in which any employee or application is allowed to communicate only with the parts of the network to which it is required. The company has hundreds of customers, including banks, communications companies, pharma companies, e-commerce companies, technology, government bodies and educational organizations.
Guardic has raised $ 110 million to date from investors such as Battery Ventures, Kumara, 83North and Greenfield Partners, as well as ClalTech, Partech, Deutsche Telecom Capital Partners, Dell, Cisco, TPG and Graylock. Another investor in the company in the beginning was Ehud Barak, but he has already sold his shares in the company in the past. The company's last raising in 2019 was in the amount of $ 60 million, and according to sources close to the issue, it was done at a value of about $ 260 million. That is, some of the later investors in the company made handsome but not dreamy returns - while early investors made much higher returns (about 20 times).
The company said that the past year was one of its best in terms of business, during which the company increased the number of its customers and recruited over 100 new employees.
The company is being sold even though its stated plan was to continue to grow independently. In an interview from the beginning of the year, Gurevitz said that "we are Israelis who live here and want to build an international company from Israel. There are huge development centers in the country with beautiful offices and sushi, but at the end the worker at such a center is someone from California. Of McAfee. "
According to sources close to the matter, the company was in the midst of a significant round of recruitment when it began accepting takeover bids, and decided to sell out of a number of considerations - chiefly the buyer's ability to give complementary capabilities to a Gardic product and reach customers and a large target audience. In addition one of the considerations was economic: to give generous rewards to employees and founders, with the alternative being to wait a few more years.
This is one of the largest ever cyber acquisitions in Israel of private companies, following the acquisition of Checkmarks by the Hellman Friedman Foundation ($ 1.15 billion); Acquisition of control of Armis by the Insight Fund ($ 1.1 billion), and acquisition of Trustee by IBM ($ 800 million)

Guardicor was founded in 2013 by Pavel Gurevitz (CEO), Ariel Zeitlin (VP of Technology), and Dror Selai (VP APAC). The company employs 350 people in development, sales and customer support centers in Israel, the United States, Canada, Brazil, India, Mexico and Western Europe.
Under the terms of the agreement, the deal is expected to close in the fourth quarter of 2021. According to the companies' announcement, the acquisition of Guardicor is expected to generate revenue for Akmai in the amount of approximately $ 35-30 million for the fiscal year 2022.
"Due to the surge in ransomware attacks and regulatory requirements, investing in technologies to reduce the spread of damage has become a critical task. Adding Guardicor products to Akmai's portfolio will allow us to provide the most effective way in the market to combat ransomware attacks," said Tom Layton, CEO of Akmai.
Gurevitz said: "Guardicor's mission is to protect corporations from damage caused by intrusions like ransomware attacks. The customer can holistically reduce risk in all products, and manage it from one place."

photo:  Guardicore