Fastly to Acquire Web Application Security Firm Signal Sciences for $775 Million

Content delivery network (CDN) provider Fastly (NYSE: FSLY) announced on Thursday that it has agreed to acquire web application security firm Signal Sciences for approximately $775 million in cash and stock. 

Founded in 2014, California-based Signal Sciences provides web application firewall (WAF) and runtime application self-protection (RASP) technologies designed to protect applications, APIs and microservices.

Signal Sciences has raised more than $61 million in funding, including $35 million in a Series C funding round in February 2019. 

Fastly plans to combine Signal Sciences’ technology with its current solutions to launch a new unified web application and API protection solution called [email protected]

The strategic acquisition will help Fastly expand its security portfolio and help it compete with companies such as Akamai and Cloudflare.

“Fastly was founded to meet developers’ need for greater visibility and control. Now, as the digital transformation movement continues to accelerate, DevOps teams are struggling with inadequate and inflexible security tools,” said Joshua Bixby, Chief Executive Officer of Fastly. “Together with Signal Sciences, we will give developers modern security tools designed for the way they work. This new solution will integrate with our [email protected] platform, accelerating the adoption of edge computing, while simultaneously solving for modern security challenges.”

Under the terms of the agreement, Fastly will pay $200 million in cash and approximately $575 million worth of Class A Common Stock, subject to customary adjustments, and also establish a retention pool of $50 million worth of restricted stock units to be granted to Signal Sciences employees. 

The transaction is expected to close in 2020.