8-KMaterial AgreementsRegulation FDOther Events+1

F5, INC. 8-K Report, Material Agreement (Mar 11, 2019)

Filed March 11, 2019For Securities:FFIV

Summary

On March 11, 2019, F5, Inc. (FFIV) announced a significant strategic acquisition through its entry into a Merger Agreement to acquire Nginx, Inc. for approximately $670 million in cash. This acquisition is poised to expand F5's capabilities in application services, security, and open source solutions, potentially strengthening its market position in the cloud-native application landscape. The transaction, approved by both companies' boards and Nginx shareholders, is expected to close in the second quarter of 2019, subject to customary closing conditions and regulatory approvals. In conjunction with this acquisition, F5 has suspended its currently authorized share repurchase program. Investors should note that the acquisition involves customary representations and warranties, indemnification obligations, and escrow arrangements for potential post-closing adjustments. The deal also includes an insurance policy to supplement indemnification obligations, with costs shared between F5 and Nginx securityholders.

Key Highlights

  • 1F5, Inc. to acquire Nginx, Inc. for approximately $670 million in cash.
  • 2The acquisition aims to enhance F5's portfolio in application services, security, and open-source technology.
  • 3Merger Agreement entered into on March 9, 2019, with F5 subsidiary Neva Merger Sub Limited.
  • 4Transaction is subject to customary closing conditions, including antitrust approvals in Russia, Germany, and Spain.
  • 5Expected closing is in the second calendar quarter of 2019.
  • 6F5 has suspended its common stock share repurchase program in connection with the acquisition.
  • 7The agreement includes provisions for indemnification, escrow, and a shared-cost insurance policy for post-closing matters.

Frequently Asked Questions

F5 is acquiring Nginx to enhance its offerings in application services, security, and to incorporate Nginx's strong open-source technology and community into its platform. This move is expected to strengthen F5's position in the growing cloud-native application market.

The aggregate consideration for the acquisition of Nginx is approximately $670 million in cash. A portion of the consideration will also be used to assume outstanding Nginx options and restricted stock units held by continuing employees.

The acquisition is expected to close later in the second calendar quarter of 2019. Closing is contingent upon customary conditions, including the expiration or termination of the Hart Scott Rodino Act waiting period and clearance under antitrust laws in Russia, Germany, and Spain.

F5 announced in conjunction with the acquisition that it is suspending its currently authorized common stock share repurchase program. The company will continue to evaluate market conditions and other factors to determine future actions regarding the program.