F5 Networks stock slips on NGINX acquisition announcement
F5 Networks Inc. shares slipped in the extended session Monday after the cloud and security application services company said it would acquire privately held NGINX Inc. for $670 million. F5 Networks shares declined 1.3% after hours, following a 2.6% gain to close the regular session at $162.09. San Francisco-based NGINX makes applications that allow businesses "undergoing digital transformation to modernize legacy, monolithic applications as well as deliver new, microservices‑based applications," NGINX said on its website. As a result, F5 said it expects "mid-single-digit" revenue growth in fiscal 2020, compared with its previous forecast of "low-to-mid single-digit" growth. For adjusted earnings per share, however, F5 now expects, "low single-digit growth," compared with its previous forecast of "mid-to-high single digit growth." F5 said it plans to pay for the deal with cash on its balance sheet, and that it will suspend its stock buyback program. F5 expects the deal to close in the second quarter.
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