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2015-10-13

Rapid7 : Rapid7 Acquires Logentries; Adds Machine Data Search to Its Leading Security Data and Analytics Platform

New Search and Forensics Capabilities Complement Rapid7's Existing Intruder
Analytics Offerings for Incident Detection and Response

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| BOSTON, Oct. 13, 2015 (GLOBE NEWSWIRE) --Rapid7, Inc. |
|(NASDAQ:RPD), a leading provider of security data and analytics solutions, |
|today announced it has acquired RevelOps, Inc. d/b/a Logentries (Logentries), |
|a leading provider of machine data search technology. With the addition of |
|Logentries' world class, cloud-based log management and search, Rapid7 will |
|enable information security teams to solve a full range of security |
|challenges, deeply investigate incidents, and more efficiently achieve their |
|compliance requirements. Rapid7 acquired Logentries for an aggregate purchase |
|price of approximately $68 million, consisting of approximately $36 million |
|in cash and $32 million in Rapid7 equity. |
| |
| |
|"We're thrilled to add Logentries' technology and team to Rapid7. The |
|disruptive combination of Rapid7's industry-leading data collection and |
|security analytics and Logentries' compelling machine data search technology, |
|enables customers to better understand and quickly respond to risk in their |
|IT environment," said Corey Thomas, president and chief executive officer of |
|Rapid7. "This is a natural progression of our security data and analytics |
|platform, complementing our value proposition and accelerating our time to |
|market." |
| |
|Customers need solutions that can quickly cut through the noise to deliver |
|valuable information about activity in their IT environment. Today, Rapid7 |
|offers one of the broadest and deepest collections of data, from the endpoint |
|to the cloud. With this robust data collection and packaged analytics, Rapid7 |
|enables security teams to quickly and accurately assess and act to reduce |
|risk, identify and respond to threat actors on the network, and consistently |
|improve their security posture. |
| |
|Logentries' innovative technology provides a powerful cloud-based solution for |
|searching, visualizing, and analyzing machine data and logs. Built-in |
|tagging, alerting, and reporting make it easy for customers to maintain a |
|proactive view of their environment and identify anomalous events. |
|Logentries' scalable, cost-effective architecture enables users to store and |
|search structured, semi-structured, and unstructured data in real time - in |
|some cases five-to-ten times faster than competing solutions - and at a lower |
|cost. |
| |
|The acquisition of Logentries accelerates Rapid7's product roadmap, adding |
|machine data search, forensics, and compliance capabilities that complement |
|and build upon Rapid7's core technology leadership and market strengths |
|around threat exposure management, and incident detection, investigation, and |
|analytics. |
| |
|Andrew Burton, chief executive officer of Logentries commented, "Rapid7's |
|leading position in the security data and analytics market gives us the |
|opportunity to reach an evolving and expanding market that is looking for |
|lower cost access to machine data, along with advanced security data |
|collection and analytics." |
| |
|Logentries is headquartered in Boston, Massachusetts, with a talented research |
|and development team based in Dublin, Ireland. Logentries serves more than |
|3,000 customers in over 65 countries across a diverse set of industries. |
|Logentries has approximately 70 employees, nearly all of whom joined Rapid7, |
|including all of the engineering and development professionals in Dublin. |
|Rapid7 will continue to build this team and invest in its presence in |
|Ireland. |
| |
|Acquisition Details and Financial Impact |
| |
| |
| |
|The acquisition of Logentries was completed on October 13, 2015 for an |
|aggregate purchase price of approximately $68 million, consisting of |
|approximately $36 million in cash from Rapid7's balance sheet, the issuance |
|of approximately 1.3 million unregistered shares of Rapid7 common stock, and |
|the assumption of vested options, which became exercisable for approximately |
|0.2 million shares of Rapid7 common stock. |
| |
|"In addition to the strong technology and business fit between Logentries and |
|Rapid7, we're excited to add their unique technology and drive new offerings |
|that are expected to be accretive to Rapid7's growth rate," said Steven |
|Gatoff, chief financial officer of Rapid7. "We anticipate the acquisition of |
|Logentries driving an incremental $10-12 million in billings in 2016. |
|Importantly, we do not expect the acquisition to have a material impact on |
|the overall timing of our attainment of positive operating cash flow or on |
|non-GAAP profitability breakeven." |
| |
|Rapid7 expects the acquisition of Logentries to be neutral to operating cash |
|flow in the second half of 2016 and to be accretive to operating cash flow, |
|non-GAAP operating income and non-GAAP earnings per share in 2017 and beyond. |
| |
| |
|For 2016, Rapid7 expects the acquisition to contribute approximately $4 |
|million to $5 million in revenue, be dilutive to non-GAAP operating loss and |
|non-GAAP loss per share by approximately $4 million to $5 million and $0.07 |
|to $0.09, respectively. |
| |
|For the fourth quarter of 2015, Rapid7 expects the acquisition to contribute |
|approximately $1.5 million in incremental billings and approximately $0.5 |
|million in revenue and to be dilutive to non-GAAP operating loss and non-GAAP |
|loss per share by approximately $2.5 million to $3 million and $0.06 to |
|$0.07, respectively. |
| |
|In order to induce Logentries' employees to join and to retain and incentivize |
|them going forward, Rapid7 has granted 910,812 shares of restricted common |
|stock to 39 individuals who became employees of Rapid7 or one of its |
|subsidiaries upon the closing of the acquisition. These awards were approved |
|by the compensation committee of Rapid7's board of directors, and were issued |
|on October 13, 2015 under and pursuant to the terms of Rapid7's 2015 Equity |
|Incentive Plan, as amended (the "Plan"). |
| |
|As required by NASDAQ Marketplace Rule 5635(c)(4), Rapid7 has today announced |
|these new employee inducement grants, which were made under a separate share |
|reserve under the Plan designated for awards to be made to new employees of |
|Rapid7 as an inducement material to such persons entering into employment |
|with Rapid7 that was not approved by Rapid7's stockholders. The inducement |
|awards described above vest over a one to three year period, with the first |
|vesting date occurring on the six month anniversary of the closing of the |
|acquisition and quarterly thereafter. Certain of these awards are subject to |
|possible accelerated vesting under certain circumstances. |
| |
|Today's Conference Call and Webcast Information |
| |
| |
| |
|Rapid7 will host a conference call today to discuss the acquisition of |
|Logentries at 5:00 p.m. Eastern Time. The call will be accessible by |
|telephone at 888-223-4580 (domestic) or 303-223-2683 (international). The |
|call will also be available live via webcast on the company's web site |
|athttp://investors.rapid7.com. A telephone replay of the conference call will |
|be available at 800-633-8284 or 402-977-9140 (access code 21779435) until |
|October 16, 2015. A webcast replay will be available |
|athttp://investors.rapid7.com. |
| |
| |
|About Rapid7 |
| |
| |
| |
|Rapid7 is a leading provider of security data and analytics solutions that |
|enable organizations to implement an active, analytics-driven approach to |
|cyber security. We combine our extensive experience in security data and |
|analytics and deep insight into attacker behaviors an...

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