CyberArk has announced its plan to acquire cybersecurity firm Venafi from private equity firm Thoma Bravo in a transaction valued at approximately USD 1.54 billion. The Israel-based cybersecurity company will purchase Venafi through a combination of USD 1 billion in cash and about USD 540 million in stock.

The deal is expected to be finalized in the second half of 2024. Following the announcement, shares of CyberArk increased by 2.3% in premarket trading. This acquisition follows Cisco Systems' USD 28 billion purchase of cybersecurity firm Splunk in September, reflecting an industry trend where companies are bolstering their enterprise security capabilities in response to growing digital security threats.

CyberArk representatives indicated that this acquisition would enhance the company’s capacity to secure machine identities in increasingly complex digital environments. The boards of directors for both companies have approved the transaction. The company, which reported a 37% increase to USD 221.6 million in total revenue and a nearly 70% rise in subscription revenue in the first quarter, anticipates that Venafi will contribute approximately USD 150 million in annual recurring revenue.

The acquisition is projected to expand CyberArk's total addressable market by nearly USD10 billion to USD 60 billion, leveraging Venafi's strong position in cloud security. The company also expects the acquisition to immediately improve CyberArk's profit margins. Thoma Bravo had invested in Venafi in December 2020, at which time the company was valued at USD 1.15 billion.

.