UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16
OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of February 2022
Commission file number: 0-30324
RADWARE LTD.
(Name of registrant)
22 Raoul Wallenberg Street, Tel Aviv 6971917, Israel
(Address of principal executive
office)
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Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Strategic Initiative to Accelerate the Cloud Business
On February 17, 2022, Radware Ltd. (“Radware,”
the “Company” or “we”) announced a strategic initiative to
accelerate the growth of its cloud security services business, which entails, among other things, the acquisition of the technology and operations of SecurityDAM Ltd., an Israeli company (“SecurityDAM”), growing its innovation center in India, and expanding its cloud service capacity and delivery network. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Acquisition of SecurityDAM's Technology and Operations
On February 17, 2022, Radware completed the acquisition of SecurityDAM's technology and operations pursuant to an Asset Purchase
Agreement, dated as of February 16, 2022, by and between Radware and SecurityDAM (the “Purchase Agreement”).
As previously disclosed, Yehuda Zisapel, the Chairman of the Company’s Board of Directors (the “Board”), and Roy Zisapel, the Company’s President and Chief Executive Officer and a member of the Board (together, the “Key Shareholders”), hold a majority stake and a minority stake, respectively, in SecurityDAM. Until the completion of the acquisition, SecurityDAM was the sole provider of scrubbing center services for the Company’s
cloud DDoS protection service through a global network of scrubbing centers pursuant to agreements the Company entered into with SecurityDAM in 2014 and 2015 (as amended, the “SDM Agreements”). Such scrubbing center services include, for example, diverting the traffic of an attacked site of a customer to a scrubbing center and mitigating the attack and licensing of software to control and monitor
such attacks. Total cost of services received from SecurityDAM amounted to approximately $11.5 million in 2021, compared to $10.2 million in 2020 and $7.1 million in 2019, and, generally, were based on a percentage of the revenues the Company
generated related to SecurityDAM’s services.
Under the Purchase Agreement, we acquired, on a cash-free, debt-free basis, substantially all of SecurityDAM’s operating
assets, including technology, and assumed certain specified post-closing liabilities related to the contracts assigned by SecurityDAM to us, for a purchase price of (i) $30.0 million (subject to adjustments for intra-party balances related to the
SDM Agreements and certain other deductions) (the “Closing Payment”) plus (ii) contingent payments of up to $12.5 million based on the performance of the
Company’s cloud DDoS protection service after the acquisition, in each case, plus VAT.
The Purchase Agreement includes customary representations,
warranties and covenants by the parties, which survived the closing and, in the case of representations and warranties, will expire, subject to certain exceptions, fifteen months following the closing. Under the Purchase Agreement, the parties have also agreed to indemnify each other against certain losses, including
losses for breaches of representations, warranties, covenants and certain additional liabilities. SecurityDAM’s indemnification obligations are subject to certain limitations, including (1) a cap of $3.0 million on its obligation to indemnify us
for breach of representations (other than fundamental representations and certain other circumstances set forth in the Purchase Agreement) and (2) a restriction that indemnification may not be sought for breach of representations (other than
fundamental representations and certain other circumstances set forth in the Purchase Agreement) unless and until the aggregate amount of damages equals or exceeds $250,000. Pursuant to the Purchase Agreement, we retained $3.0 million from the
Closing Payment as security for the satisfaction of indemnification obligations of SecurityDAM.
SecurityDAM, the Key Shareholders and certain key employees of SecurityDAM entered into non-competition agreements with us whereby they
agreed, among other things, that, for the periods set forth therein, they would refrain from competing with us in the business that SecurityDAM conducted prior to the closing, with certain exceptions set forth therein.
Since SecurityDAM is a related party, our Board determined to form a special committee of directors consisting solely of independent
directors (the “Special Committee”) to examine the transaction and its alternatives, determine whether to pursue the transaction, and negotiate and approve
its terms. The Special Committee engaged Stifel, Nicolaus & Company, Incorporated as its independent financial advisor and Gross & Co. as its independent legal advisor. Based on the unanimous recommendation of the Special Committee, the
Purchase Agreement was also approved by the Audit Committee of the Board and all of the disinterested Board members.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
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RADWARE LTD.
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Date: February 17, 2022
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By:
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/s/ Gadi Meroz
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Gadi Meroz
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Vice President & General Counsel
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Exhibit Number
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Description of Exhibits
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