Cisco to Acquire OpenDNS for $635 Million

Cisco said on Tuesday that it would pay roughly $635 million in cash to acquire San Francisco-based OpenDNS, the company best known for its DNS service that adds a level of security by monitoring domain name requests.

According to Cisco, the acquisition builds on Cisco’s “Security Everywhere approach,” adding broad visibility and threat intelligence from the OpenDNS cloud platform. The networking giant says OpenDNS’ threat protection capabilities complement and enhance Cisco’s current cloud security offerings, and over time, will be combined with Cisco’s cloud-delivered solutions. 

Earlier this year, OpenDNS unveiled NLPRank, a new model designed to detect both opportunistic phishing campaigns and advanced persistent threats (APTs) by identifying certain patterns in DNS traffic.

Cisco said that OpenDNS employees will join its Security Business Group led by David Goeckeler, senior vice president and general manager.

OpenDNS also will continue to offer its free DNS service.

Under the terms of the agreement, Cisco, which previously invested in OpenDNS, will pay $635 million in cash and assumed equity awards, along with additional retention based incentives for the company.

“We made this decision to sell OpenDNS because I believe we can take our incredible teams and technologies, and harness the resources, reach, and scale of Cisco to deliver better products faster, while recognizing an incredible and rarely experienced milestone for all of us along the way,” David Ulevitch, Founder and CEO at OpenDNS, wrote in a letter to his employees.

The acquisition is expected to close in the first quarter of fiscal year 2016, subject to customary closing conditions, Cisco said.

The move to acquire OpenDNS follows other acqusitions by Cisco in the security sector, including its acquisition of ThreatGRID, Neohapsis, Virtuata, and its $2.7 billion acquistion of Sourcefire in 2013.

Investors in OpenDNS include Greylock Partners, Sequoia Capital, Sutter Hill Ventures, Glynn Capital, Cisco, Evolution Equity, Lumia Capital, Mohr Davidow Ventures, and Northgate Capital.