CyberArk will acquire cyber security firm Venafi from private equity firm Thoma Bravo in a deal valued at around US$1.54 billion ($2.3 billion).
The Israel-based information security services provider will acquire Venafi in a combination of US$1 billion in cash and around US$540 million in stock, and expects the deal to close in the second half of 2024.
The deal comes months after Cisco Systems bought out cyber security firm Splunk for US$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 percent rise to US$221.6 million in total revenue and a near 70 percent jump in subscription revenue in the first quarter, expects Venafi to add around US$150 million in annual recurring revenue.
The deal will allow Venafi to expand CyberArk’s total addressable market by nearly US$10 billion to US$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 US$1.15 billion at the time.