Liquid software company, JFrog has announced its acquirement of Vdoo Connected Trust Ltd in a cash and stock-based deal valued at approximately $300 million. As part of the JFrog Platform, Vdoo will expand its end-to-end DevOps Platform offering security from the development environment to IoT and devices. Vdoo’s researchers will join the JFrog team to continue to develop security solutions for developers and security engineers and will seek to deliver a complete DevSecOps solution to secure the full software packages lifecycle.
Many of today’s DevOps solutions are missing proper security capabilities that are fully integrated into the software lifecycle. Security tools are disparate, each with its own data set, which creates friction between development and security teams, slowing the releases of software updates – especially when continuously delivering to the edge or across a large fleet of devices. As a result, many of these security tools are not delivering on the promise of fast, automated, and secure releases.
The market demands a holistic process that secures software components all the way to the edge, consolidates security data for efficient decision-making, saves time and resources, and blesses an end-to-end delivery system with the highest integrity for security-certified releases – from any source to any endpoint.
“We are excited to have Vdoo join the JFrog family,” said Shlomi Ben Haim, co-founder and CEO of JFrog. “It is clear to us that the joint vision of changing the way software is being created, released, and updated to the edge will be our compass as we offer the market a binary-focused solution to secure their organization’s software assets. This move will amplify JFrog’s current success with our security solution, JFrog Xray, and create the expectation that ‘fearless releases’ will be the experience for both Security and Development teams.”
“This proposed acquisition is a great fit for both our companies,” said Netanel (Nati) Davidi, co-founder and CEO of Vdoo. “We share a vision around DevOps and security: if any DevOps company isn’t also a security company, it is solving only a small piece of the puzzle. We’re proud that our team has focused on being hybrid and holistic, and integrated across all dimensions throughout the software delivery life cycle. We look forward to continuing to power this Liquid Software mission as part of JFrog, and anticipate industry-changing innovations from the joint team.”
As part of the integration process, JFrog will expand its security experts team – including engineering, marketing, and sales – with employees that will be located in Israel, Germany, Japan and North America. In addition, JFrog will expand JFrog Xray vulnerability detection this year to include Vdoo’s extensive data and improved scanning across multiple dimensions, including configuration and applicability scanning. JFrog also expects to fully integrate Vdoo’s technology into its DevOps platform to provide an all-in-one secured platform in 2022.
In the immediate term, Vdoo’s SaaS product will remain in operation, with new development of features and functions focusing on the JFrog Platform solution. Following the completion of the acquisition, JFrog and Vdoo will work with customers to ensure business continuity and streamlined migration to the joint offering.
Under the terms of the definitive agreement, JFrog has agreed to acquire Vdoo for $300 million subject to adjustments as set forth in the purchase agreement for cash free debt free basis, to be paid in a combination of cash and share consideration. Of the purchase price, approximately $90 million will be paid with JFrog ordinary shares based on the average close price of the shares during the last 15 trading days. JFrog reiterated the financial guidance provided on May 6, 2021.
For the second quarter ended June 30, 2021, JFrog expects revenues of $47.6 million to $48.6 million, with non-GAAP operating income of $0.5 million to $1.5 million and non-GAAP EPS of $0.00 to $0.01, assuming approximately $104 million weighted average diluted shares outstanding. For Full Year 2021, revenues are expected to be $198 million to $204 million, with non-GAAP operating income between $5 million and $7 million and an approximately 3% increase in weighted average diluted shares.
Subject to the closing of the proposed acquisition, JFrog anticipates its consolidated operating expenses to increase by approximately $9-10 million for the remainder of 2021.
