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Palo Alto Networks agreed to acquire cloud-security company RedLock for approximately $173 million in cash on October 3, 2018, and completed the deal on October 12. RedLock brought cloud-security analytics for discovering public-cloud assets, detecting threats, monitoring compliance and automating remediation across AWS, Microsoft Azure and Google Cloud Platform.
What happened in the RedLock acquisition?
Palo Alto Networks announced a definitive agreement to acquire RedLock Inc. on October 3, 2018. The company described RedLock as a cloud-threat-defense business focused on cloud-security analytics. The transaction was completed nine days later, on October 12, 2018.
| Milestone | Details |
|---|---|
| Announcement | October 3, 2018: Palo Alto Networks announced an agreement to acquire RedLock for approximately $173 million in cash. Palo Alto Networks announcement |
| Closing | October 12, 2018: Palo Alto Networks said the acquisition was complete and the company had paid approximately $173 million in cash, excluding purchase-price adjustments. Palo Alto Networks completion announcement |
RedLock co-founders Varun Badhwar and Gaurav Kumar were expected to join Palo Alto Networks as part of the announced deal. The announcement also said Palo Alto Networks served more than 6,000 cloud customers globally at the time; that was the company’s 2018 figure, not a current customer count. Palo Alto Networks announcement
Why do reports give both $173 million and $158.2 million?
The approximately $173 million figure was Palo Alto Networks’ announced cash transaction price. Its fiscal 2019 Form 10-K later reported $158.2 million in total purchase consideration, calculated for financial reporting using a different accounting basis. That total comprised $155.0 million in cash paid at closing and $3.2 million representing the fair value of unvested equity awards attributable to services performed before the acquisition. Palo Alto Networks Form 10-K for fiscal 2019
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These figures describe different transaction measures, so the $158.2 million accounting total should not be substituted for the company’s approximately $173 million cash announcement. The closing release explicitly excludes purchase-price adjustments from its cash figure.
What did RedLock add to Palo Alto Networks’ cloud security?
RedLock added analytics intended to give security teams visibility into resources and risks spread across public-cloud environments. Palo Alto Networks described the planned capability as operating across Amazon Web Services (AWS), Microsoft Azure and Google Cloud Platform (GCP), rather than being limited to one cloud provider. Palo Alto Networks announcement
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Palo Alto Networks illustrated remediation with an exposed database scenario: if a cloud security group were accidentally left open and its MongoDB virtual machine received traffic from a known malicious IP address, RedLock could identify the exposure and automatically move the database into a private security group. This was the company’s example of the technology’s intended response, not a claim that every cloud incident would be handled identically. Palo Alto Networks technical explanation
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Palo Alto Networks said it would combine RedLock with its existing Evident technology in a single offering. The stated direction was to pair cloud-security analytics with advanced threat detection and continuous security and compliance monitoring, with automated, real-time remediation and reports that would surface organizational cloud risks. The rationale was to reduce reliance on manual investigations while helping customers secure multi-cloud deployments. Palo Alto Networks completion announcement
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