CyberArk Software Ltd. (NASDAQ:CYBR) inked a deal to acquire Venafi from Thoma Bravo for an enterprise value of $1.54 billion.
The acquisition value includes around $1 billion in cash and about $540 million in shares. The transaction is expected to close in the second half of 2024, subject to customary closing conditions.
Post closure, the company expects Venafi to add around $150 million in annual recurring revenue (ARR). Also, Venafi is projected to bring a strong business model, with 95% in recurring revenue, including SaaS and Term Based License Revenue.
The transaction is anticipated to be accretive to margins immediately, with significant revenue synergies through cross-sell, up-sell, and geographic expansion.
The company anticipates Venafi bringing complementary capabilities to protect machine identities and boosting the Total Addressable Market (TAM) from $50 billion to $60 billion.
Matt Cohen, Chief Executive Officer, said, "By combining forces with Venafi, we are expanding our abilities to secure machine identities in a cloud-first, GenAI, post-quantum world. Our integrated technologies, capabilities and expertise will address the needs of global enterprises and empower Chief Information Security Officers to defend against increasingly sophisticated attacks that leverage human and machine identities as part of the attack chain."
Chip Virnig, a Partner at Thoma Bravo, stated, "Over the course of our investment, Venafi has accelerated SaaS growth, expanded margins, and successfully created a best-in-class SaaS offering, setting the stage for continued innovation. We believe CyberArk is a great partner for Venafi and that the scaled end-to-end machine identity security platform created by this strategic combination will deliver significant value to shareholders."
CyberArk held $1.4 billion in cash and equivalents as of March-end.
CyberArk Software stock gained over 62% in the last 12 months. Investors can gain exposure to the stock via First Trust NASDAQ Cybersecurity ETF (NASDAQ:CIBR) and IShares Cybersecurity And Tech ETF (NYSE:IHAK).
Price Action: CYBR shares are up 0.54% at $247.66 at the last check Monday.
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