Progress (NASDAQ: PRGS), the leading provider of products to develop, deploy and manage high-impact applications, today announced that it has entered into a definitive agreement to acquire privately held Kemp, the always-on application experience company that helps enterprises deliver, optimize and secure applications and networks across any cloud or hybrid environment. With this acquisition, Progress will extend its portfolio of market-leading products in DevOps, Application Development, Data Connectivity and Digital Experience, by adding Application Experience Management (AX).
“Now more than ever, businesses recognize that their applications must always be available and highly performant,” said Yogesh Gupta, CEO, Progress. “The Kemp products address this exact need and complement our portfolio of best-in-class products to develop, deploy and manage high-impact applications.”
Kemp Loadmaster and Flowmon Network Visibility products monitor application performance, and distribute and balance traffic and workloads across servers, in the cloud or on premise, ensuring high performance and availability. They do this by leveraging machine learning to identify anomalies and alert IT professionals before end-users are impacted. These capabilities complement Progress offerings, such as WhatsUp Gold, a market leader in easy-to-use network management. Combined, they will offer the best application experience solution in the market.
“The acquisition of Kemp also furthers our total growth strategy and will enable us to add scale and cash flow, creating significant shareholder value,” added Mr. Gupta.
Kemp meets Progress’ key acquisition criteria of adding solid levels of recurring revenue, complementary technology and loyal customers and will provide an opportunity for Progress to leverage its larger platform for improved efficiency.
“We are extremely proud of what we’ve been able to achieve as a business,” said Ray Downes, CEO, Kemp. “As part of Progress, I am confident Kemp will thrive in the next chapter of its journey. Not only will the combined product portfolio provide great benefit to our customers and partners, but the cultural alignment and customer-first focus demonstrated by both organizations are impressive and will surely lead to long-term success for all.”
Transaction Details
Progress will acquire Kemp for $258 million in cash. The acquisition is expected to close in October 2021, subject to obtaining regulatory approvals and satisfaction of other customary closing conditions. Progress expects to fund the purchase price with cash on hand. The transaction is expected to be accretive to both non-GAAP earnings per share and cash flow, beginning in the fiscal fourth quarter of 2021.
Lincoln International served as the exclusive financial advisor to Kemp on this transaction. Wilmer Cutler Pickering Hale and Dorr LLP served as Progress’ legal counsel and Lowenstein Sandler LLP served as Kemp’s legal counsel with respect to the transaction.
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