F5 Networks has entered into a definitive agreement to buy Telstra-backed web server Nginx in a deal valued at US$670 million.
Through the acquisition, the vendor expects to accelerate its growth trajectory by boosting software and multi-cloud transformation capabilities.
In return, F5 will enhance Nginx's offering with it security solutions and by integrating its cloud-native innovations with Nginx software load balancing technology.
Established in 2004, Nginx is expected to increase F5’s software revenue growth and increase the company’s software revenue mix in fiscal year 2019.
In the short-term, F5 expects the acquisition and organic investment in new and emerging solutions will result in modest earnings dilution in fiscal years 2019 and 2020.
"NGINX and F5 share the same mission and vision," said Gus Robertson, CEO of Nginx. "We both believe applications are at the heart of driving digital transformation.
"And we both believe that an end-to-end application infrastructure – one that spans from code to customer – is needed to deliver apps across a multi-cloud environment.
"I’m excited to continue this journey by adding the power of NGINX’s open source innovation to F5’s ADC leadership and enterprise reach. F5 gains depth with solutions designed for DevOps, while NGINX gains breadth with access to tens of thousands of customers and partners."
The Nginx brand will be maintained following the acquisition and Robertson, along with Nginx's founders Igor Sysoev and Maxim Konovalov, will join F5 and continue to lead the business.
Robertson will join F5’s senior management team, reporting to François Locoh-Donou. F5 will maintain NGINX’s operations in San Francisco, California and other locations globally.
The acquisition has been approved by the boards of directors of both companies and, following execution of the definitive agreement, received the requisite shareholder approval of Nginx.
However, the deal is still subject to regulatory approvals and other customary closing conditions and is expected to close in the second calendar quarter of 2019.
F5 will also leverage its global sales force, channel infrastructure and partner ecosystem to scale Nginx selling opportunities to the enterprise.
In October, Nginx revealed a new global partner program in an effort to provide a flexible framework across its various partner network.
The program was developed to identify key ways partners engage with the company, aiming to accommodate partners interested in a cross section of areas.
This includes partners creating integrations and certifying interoperability with their own platforms; developing modules that extend Nginx’s products and capabilities; offering Nginx products as part of a portfolio of technology and services; building custom solutions with Nginx and growing their technology consulting practice as an Nginx associate.