DivvyCloud’s customers include Spotify and Pizza Hut
The acquisition, to be paid in cash and stock, is expected to close in Q2, Nasdaq-listed Rapid7 said. The buyout represents the Boston-based SIEM provider’s sixth acquisition in five years.
The deal comes as Gartner says that it expects $250 billion of spending on public cloud services in 2020, with 80 percent of users using two-plus clouds.
DivvyCloud, based in Arlington, Virginia, specialises in protecting cloud and container environments from misconfigurations and policy violations. Its customers include Spotify and Pizza Hut. It offers security support for AWS, Azure, GCP, Alibaba Cloud and Kubernetes.
Its CEO Brian Johnson said the approach was accepted owing to both technological and cultural alignment. As he put it: “Rapid7 invests in passion, ownership, and to put it bluntly, ‘not being an asshole'”.
Nasdaq-listed Rapid7 is a SIEM provider with over 9,000 customers. It will pay $128.3 million in cash at closing, $7.4 million of deferred cash payments and $9.3 million in stock. DivvyCloud co-founders Brian Johnson and Chris DeRamus have agreed to join Rapid7.
The acquisition is a bullish move in troubled times: it came as Rapid7 opened a new three-year revolving credit facility that provides borrowing capacity up to $30 million, expandable to $70 million. It also announced a planned private placement of $200 million of convertible senior notes due 2025.
“Gartner forecasts CSPM [cloud security posture management] to grow 20 percent in 2021, faster than any other segment” Rapid7 said of the announcement, adding: “Support for multiple cloud environments will be a key differentiator”.
CEO Corey Thomas said: “We have been very impressed with the DivvyCloud team and its technology for some time… [their] platform will be an important part of our offering, giving customers a much deeper, comprehensive view into their cloud security posture”.
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