Microsoft Plans to Buy Israel's Adallom

TEL AVIV—Microsoft Corp. has signed a letter of intent to buy Israel-based cloud information-security company Adallom Inc., according to two people familiar with the matter. The expected price of the all-cash deal is about $320 million, according to one of the people.

Microsoft declined to comment. A representative for Adallom wasn't immediately available to comment.

If completed, the deal would be Microsoft's fourth acquisition in Israel since the start of 2015. Israeli financial newspaper Calcalist previously reported the deal.

Founded in 2012, Tel Aviv-based Adallom develops and markets a service aimed at ensuring the security of cloud-based applications. It offers its services to customers using cloud applications such as Microsoft's Office 365, Google Inc.'s Google Apps, and the applications offered by Salesforce.com Inc. and ServiceNow Inc.

Adallom's service monitors the use of the cloud application by individual employees, identifying patterns and then singling out anomalies as possible breaches. Competitors include Skyhigh Networks Inc., Elastica Inc. and CloudLock Inc.

Adallom's customers include SAP SE, LinkedIn Corp. and Netflix Inc.

In January, Microsoft bought Israel-based Aorato Ltd., a company that develops software that monitors access to central communication components in enterprise IT systems.

According to the people familiar with the matter, Adallom, which employs 90 people world-wide, will continue to operate from Israel, building up Microsoft's cybersecurity-focused operations in the country.

Write to Orr Hirschauge at [e-mail]

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