NEWTON, Mass. & PETACH TIKVA, Israel - CyberArk (NASDAQ: CYBR), a global leader in identity security, has entered into a definitive agreement to acquire the machine identity management company Venafi.
The deal, valued at approximately $1.54 billion, will be paid in a mix of cash and CyberArk shares. This strategic move aims to enhance CyberArk's identity security capabilities and expand its market reach.
The acquisition is expected to close in the second half of 2024, pending regulatory approvals and other customary closing conditions. Venafi's addition to CyberArk's portfolio is anticipated to bring approximately $150 million in annual recurring revenue and is immediately accretive to margins. Venafi's machine identity management solutions are seen as complementary to CyberArk's existing offerings, potentially creating a more comprehensive platform for end-to-end machine identity security.
As the digital landscape evolves, with an increasing number of machine identities from IoT devices to cloud workloads, the need for robust identity management becomes more critical. Venafi's technology addresses the complex challenges of securing machine identities, which are becoming a prime target for cybercriminals due to their rapid growth and the lucrative opportunities they present for exploitation.
The combined capabilities of the two companies are expected to provide organizations with a wide range of options for machine identity security, deployable as SaaS or hybrid solutions. This unification is set to expand CyberArk's total addressable market by nearly $10 billion, reaching an approximate $60 billion.
CyberArk's CEO, Matt Cohen, emphasized the significance of this acquisition, stating it will advance the company's vision to secure every identity, human and machine, with appropriate privilege controls. He also pointed out that the integration of technologies and expertise will aid global enterprises in defending against sophisticated attacks that exploit both human and machine identities.
The transaction has been approved by the Boards of Directors of both CyberArk and Venafi. Financial advisors for the deal include Morgan Stanley (NYSE:MS) & Co. LLC for CyberArk and Piper Sandler for Thoma Bravo, Venafi's parent company.
The information is based on a press release statement.
InvestingPro Insights
In light of CyberArk's (NASDAQ: CYBR) recent strategic acquisition of Venafi, investors are closely monitoring the company's financial health and market positioning. According to InvestingPro data, CyberArk boasts an impressive gross profit margin of 80.23% for the last twelve months as of Q1 2024, reflecting the company's ability to maintain profitability in its core operations. This is particularly relevant as CyberArk integrates Venafi's machine identity management solutions, which are expected to be immediately accretive to margins.
Moreover, CyberArk's market capitalization stands at $10.42 billion, with a significant revenue growth of 29.7% over the last twelve months as of Q1 2024. This growth trajectory is indicative of the company's expanding market reach and the increasing demand for identity security solutions, which may be further propelled by the Venafi acquisition.
From an investment perspective, InvestingPro tips highlight that CyberArk holds more cash than debt on its balance sheet, which can provide financial flexibility and resilience. Additionally, 21 analysts have revised their earnings upwards for the upcoming period, signaling positive sentiment around the company's future performance. For those looking to delve deeper, there are 12 additional InvestingPro tips available, which can be accessed through the InvestingPro platform. For readers interested in exploring these insights, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
As the company navigates the integration of Venafi and aims to capture a larger share of the $60 billion total addressable market for identity security, these financial metrics and expert analyses offer valuable context for understanding CyberArk's strategic moves and investment potential.
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