Cloud services provider Akamai Technologies, Inc. [AKAM] yesterday said it has agreed to acquire Prolexic Technologies in a $370 million cash deal that would boost is security solutions capabilities and add new customers, particularly in the financial sector.

Akamai said the acquisition, if factored into 2013 results, would double the size of its security business by adding about $50 million and over 200 employees to this business.

Once the deal closes, which is expected to occur during the first half of 2014 pending regulatory approvals, it will give Akamai “instant critical mass” in the security business, Jim Benson, the company’s chief financial officer, said on an analyst call. The acquisition will “significantly enhance the scale” of Akamai’s security business and “scale matters in the security market,” Tom Leighton, Akamai’s CEO, said on the call.

Prolexic has over 400 customers and has “strong growth momentum,” Benson said. He said that growth is expected to continue and add four percent to Akamai’s growth in 2014. Akamai expects the acquisition to be dilutive to earnings by between six and eight cents per share in the first full year following the merger.

Through the first three quarters of 2013, Akamai’s sales are up 15 percent to $1.1 billion while neat income is up 57 percent to $213.1 million.

Akamai CEO Tom Leighton
Photo: Akamai

Prolexic, which is based in Florida, has core capabilities in cloud security services for the protection of data centers and enterprise Internet Protocol applications from distributed denial of service (DDoS) attacks.

Akamai provides its customers with Web application security solutions with DDoS mitigation technologies and application firewalls. Prolexic gives Akamai DDoS security solutions for non-Web applications such as email, virtual private networks and file transfers, as well as enterprise data centers and IP address space.

Prolexic also operates a round-the-clock security operations center to detect and mitigate attacks on its customers, Leighton said.

Leighton said that Prolexic’s customer base in the financial sector is an important vertical market for Akamai. Prolexic also has customers in healthcare, government and defense, telecommunications, high technology, business and others.

“By acquiring Prolexic, we believe that Akamai will be able to extend our optimization and security solutions to protect all enterprise applications,” Leighton said.

Prolexic’s financial adviser in the deal is America’s Growth Capital.