- Palo Alto Networks has held talks to buy CyberArk for over $20 billion in a deal that would bring together two big players in security, according to the Wall Street Journal.
- Nikesh Arora, who joined as Palo Alto Networks’ CEO in 2018, has been on a buying spree in recent years, but CyberArk would represent by far his biggest bet.
- Palo Alto Networks has a market cap of around $132 billion.
After The Wall Street Journal revealed that cybersecurity company Palo Alto Networks had held talks to acquire the identity management software manufacturer for more than $20 billion, CyberArk shares surged as much as 18% on Tuesday.
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As ransomware attacks become more frequent and rapid advances in artificial intelligence bring with them a whole new set of threats, cloud security is becoming an increasingly important component of the enterprise tech stack.
Founded in 2005, Palo Alto Networks has become the largest player in the cybersecurity market by market capitalization, valued at over $130 billion, and has emerged as a consolidator in recent years. Since taking over in 2018, CEO Nikesh Arora has been spending a lot of money. In 2023, he purchased Talon Cyber Security, Dig Security, and Zycada Networks, and in July, he acquired Protect AI.
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However, CyberArk would be Arora’s largest wager to date. The Israeli business, which went public in 2014, offers technology that enables businesses make it easier for staff members to log in to applications.
HashiCorp from IBM, Microsoft, and Okta are competitors of CyberArk. In February, SailPoint, another competitor, made a comeback to the public markets.
CyberArk’s stock surged to a record on Tuesday, beating its previous all-time high set in February. After rising 52% in 2024, the stock is up 29% this year, bringing the company’s market capitalization to about $21 billion. In contrast, Palo Alto shares fell 3.5% following the report, but they are already up roughly 9% year-to-date.
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Palo Alto Networks and CyberArk representatives chose not to comment.
CyberArk made around $11.5 million in net profits on about $318 million in revenue during the first quarter, a 43% increase over the same period last year.
Big deals in the cyber market have been active throughout this time.In order to strengthen its cloud business with more AI security technology, Google announced in March that it was investing $32 billion on Wiz, by far its largest acquisition to date.
In 2023, networking behemoth Cisco completed its largest acquisition in the security sector when it paid $28 billion to acquire Splunk. By monitoring and analyzing data, Splunk’s technology helps businesses reduce the risk of hacks and quickly fix technical problems.
Ari Levy of CNBC contributed to this article.
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