Post-IPO, Rapid7 Buys Logentries to Grow Data Analytics Offerings

Rapid7 scooped up Logentries for $68 million today in the Boston cybersecurity company’s first acquisition since going public in July.

The acquisition of Boston-based Logentries broadens the capabilities of Rapid7 (NASDAQ: RPD), which primarily sells software that helps organizations find security flaws in their IT infrastructure, check whether they’ve been fixed, and detect and respond to attacks.

Logentries, meanwhile, offers cloud-based software that can quickly search and analyze machine data and the running log of every action taken by customers’ software-enabled devices, such as servers and computers. Related companies include Splunk, Sumo Logic, and Logz.io, which launched this month with $8 million from investors.

Logentries was founded in the Dogpatch Labs incubator in Dublin, Ireland, but later moved its headquarters to Boston. The company raised about $11 million from investors including Polaris Partners, RRE Ventures, and Frontline Ventures. It has about 70 employees between the two cities, nearly all of whom have joined Rapid7, the company said. Rapid7 said it intends to expand the engineering and software development team in Dublin.

The deal includes $36 million in cash and $32 million worth of Rapid7 stock.

The company anticipates Logentries boosting Rapid7’s 2016 revenue by $4 million to $5 million. Rapid7 reported an operating loss of $8.6 million on $25.8 million in revenue in the second quarter of 2015.

So far, Rapid7 is the only Boston-area tech company to go public this year.

Jeff Engel is a senior editor at Xconomy. Email: jengel@xconomy.com Follow @JeffEngelXcon

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