Cybersecurity company CyberArk to acquire Venafi in $1.5 billion deal

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(Reuters) -CyberArk said on Monday it will acquire cybersecurity firm Venafi from private equity firm Thoma Bravo in a deal valued at around $1.54 billion.

The Israel-based information security services provider will acquire Venafi in a combination of $1 billion in cash and around $540 million in stock, and expects the deal to close in the second half of 2024.

Shares of CyberArk gained 2.3% in premarket trading.

The deal comes months after Cisco Systems bought out cybersecurity firm Splunk for $28 billion in September as firms look to strengthen their enterprise security products amid increasing digital safety threats.

“By combining forces with Venafi, we are expanding our abilities to secure machine identities in a cloud-first, GenAI, post-quantum world,” said CyberArk CEO Matt Cohen.

The boards of both the companies have approved the transaction.

CyberArk, which reported a 37% rise to $221.6 million in total revenue and a near 70% jump in subscription revenue in the first quarter, expects Venafi to add around $150 million in annual recurring revenue.

The deal will allow Venafi to expand CyberArk’s total addressable market by nearly $10 billion to $60 billion due to its strong presence in cloud security, the company said, adding that the acquisition will be accretive to CyberArk’s margins immediately.

Thoma Bravo made a growth investment in Venafi in December 2020, valuing the company at $1.15 billion at the time.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Vijay Kishore)