Cloudflare, Inc. agreed to acquire Area 1 Security, Inc. for approximately $160 million on February 14, 2022. Consideration was paid in cash and stock. 40% of the purchase price amounting to $162.0 million is payable in the company's Class A common stock and the remainder is payable in cash. The purchase is set to close early in the second quarter of 2022. As of March 1, 2022, the transaction is expected to close during the three months ended June 30, 2022. Ben Potter, Dan Hoffman, Kirt Switzer, Jay Metz, Sarah Gagan and Joshua Holian of Latham & Watkins LLP acted as legal advisor to Area 1 Security, Inc. Bill Curtin, Sean Collins, Lauren Battaglia, Lee Berner, Mark Brennan, Kevin Clayton, Dan Davidson, Mike Frank, Jasper Howard, George Ingham, Ajay Kuntamukkala, Michael Larner, Tao Leung, Scott Loughlin, Richard Parrino, Audrey Reed, Bill Regan, T. Weymouth, Gabi Witt, James Denvil, Ashlee Sawyer Gilson, and David Michaeli, Drew Cook, Patrick de Laperouse, Rachel Eisen, Leslie Graham, Khaled Mowad, Morgan Perna, Nirupa Persaud, Nathan Salminen, and Brooke Shekhar. Associates: Nicole Banton, Toni Cannady, Ben Kim, and A.J. Santiago. Other Hogan Lovells Team Members: Irina Abbas (Paralegal), Elizabeth Ohman (Researcher), Mick Bowman (IP Support SSR), Jessica Nichelson (Paralegal Specialist) of Hogan Lovells US LLP acted as legal advisor to Cloudflare, Inc.

Cloudflare, Inc. completed the acquisition of Area 1 Security, Inc. on April 1, 2022. The total purchase consideration included (i) cash payments of $82.6 million, net of $2.5 million of cash acquired, (ii) $63.5 million in shares of the Cloudflare's Class A common stock, (iii) a cash holdback of $9.3 million, which the Cloudflare is retaining for up to 12 months and will be payable to the previous owners of Area 1, subject to offset by the Cloudflare for any of the previous owners' indemnification obligations in connection with the acquisition, and (iv) a cash holdback of $1.1 million, which the Cloudflare is retaining for up to five months and will be payable to the previous owners of Area 1, subject to the final purchase price adjustment. Concurrent with the closing of the acquisition, the Cloudflare made a cash payment of $4.1 million to repay Area 1's debt, which was part of the acquisition-date cash payments included in the purchase consideration.