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Fastly, Inc., provider of an edge cloud platform, announced that it has entered into a definitive agreement to acquire Signal Sciences for approximately $775 million in cash and stock. The acquisition will expand Fastly’s robust security portfolio at a time when security at the edge has never been more critical. Signal Sciences' strong, developer-first web application and API protection solutions will bolster Fastly's existing security offerings to bring customers a unified edge security solution.

Signal Sciences’ technology combined with Fastly’s current solutions will form Fastly’s upcoming new security offering, Secure@Edge. Secure@Edge will be a modern, unified web application and API protection solution that will power and protect companies looking to further or begin their digital transformation.

API protection solution

The acquisition supports Fastly’s mission to provide simplified, secure, and frictionless solutions at scale, and to transform the security landscape by offering an alternative to the existing array of opaque, fragmented and inflexible solutions needed to protect web applications and APIs.

Fastly’s enhanced web application and API protection solution will deliver increased agility and visibility

Signal Sciences’ developer-friendly and fully programmable security solution delivers exceptional visibility, enabling businesses to make accurate and automated security decisions and providing efficient protection at scale. With Signal Sciences’ technology, Fastly’s enhanced web application and API protection solution will deliver increased agility, visibility, and protection as more code and applications move to the edge.

Digital transformation movement

“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 Compute@Edge platform, accelerating the adoption of edge computing, while simultaneously solving for modern security challenges. We look forward to working with the talented team at Signal Sciences as we continue to innovate and deliver revolutionary security and edge computing solutions together.”

Secure web applications

“Our mission has always been to secure web applications and APIs through a developer-first approach. Together with Fastly, we will be able to offer enhanced protection to a broader set of customers across multiple verticals and geographies,” said Andrew Peterson, Co-Founder and Chief Executive Officer of Signal Sciences.

“We are thrilled to be joining forces with Fastly, an ideal partner who shares our values, deep technical knowledge, and commitment to extending the DevOps movement into the realm of security.”

Customary adjustments

Fastly will acquire Signal Sciences for $200 million in cash and approximately $575 million worth of Class A Common Stock

Under the terms of the definitive agreement, Fastly will acquire Signal Sciences for $200 million in cash and approximately $575 million worth of Class A Common Stock, subject to customary adjustments for transactions of this nature.

The per share portion of the stock consideration will be based, subject to a two-way price collar, on the volume-weighted average price of a share of Class A Common Stock over the ten (10) consecutive trading day period ended on and including the third trading day immediately prior to the date of the closing.

Restricted stock units

Fastly will also establish a retention pool of $50 million worth of restricted stock units to be granted to Signal Sciences employees. The transaction is subject to certain customary closing conditions, including receipt of required regulatory approvals, and is expected to close in 2020. Morgan Stanley & Co. LLC and Union Square Advisors are acting as financial advisors to Fastly, and Cooley LLP is acting as its legal advisor with regard to the transaction.

Qatalyst Partners is acting as financial advisor to Signal Sciences, while Goodwin Procter, LLP is acting as its legal adviser.

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