American cyber giant Palo Alto Networks has reached an agreement to acquire Israeli firm CyberArk for $25 billion, marking the second-largest exit ever for an Israeli company, the company announced on Wednesday.
Under the terms of the agreement, CyberArk shareholders will receive $45 in cash and 2.2005 shares of Palo Alto Networks common stock for each CyberArk share.
The U.S. company said this strategic combination will mark its formal entry into identity security, establishing it as a core pillar of the company’s multi-platform strategy.
Identity security refers to the set of technologies, policies, and practices designed to protect digital identities and control access to information within an organization’s systems and data.
Combining CyberArk’s leadership in Identity Security and Privileged Access Management with Palo Alto Networks’ comprehensive AI-powered security platforms “will extend privileged identity protection to all identity types, including human, machine and the new wave of autonomous AI agents,” the American firm noted.
Palo Alto Networks specializes in network and computer security, protecting companies from external breaches. CyberArk specializes in securing access and passwords within organizations. According to both, the combination of their capabilities is expected to create a comprehensive “security envelope,” with Palo Alto guarding organizations externally and CyberArk maintaining internal order.
“Today, the rise of AI and the explosion of machine identities have made it clear that the future of security must be built on the vision that every identity requires the right level of privilege controls,” said Nikesh Arora, chairman and CEO of Palo Alto Networks. “Together, we will define the next chapter of cybersecurity.”
Udi Mokady, founder and executive chairman of CyberArk, said, “Joining forces with Palo Alto Networks is a powerful next chapter, built on shared values and a deep commitment to solving the toughest identity challenges.”
The partnership between Palo Alto and CyberArk will “bring unmatched expertise across human and machine identities, privileged access and AI-driven innovation to secure what’s next,” he said.
Demi Ben-Ari, co-founder and chief strategy officer of cybersecurity company Panorays, said in an interview on Wednesday with Israeli financial paper Globes that Palo Alto Networks already operates in the cybersecurity field through other products, such as database security, “but it has never had a suite of products for it.”
Arora and Israeli entrepreneur Nir Zuk, co-founder and chief technology officer of Palo Alto Networks, “want to turn the company into the biggest cybersecurity supermarket in the world, in which customers—enterprise data security managers—will be able to find everything they need in one place, and to that end they’re prepared to pay a premium,” Ben-Ari said.
In March, Alphabet, the parent company of Google, confirmed its $32 billion acquisition of Israeli cloud security firm Wiz, making it the tech giant’s largest deal to date and currently the largest exit registered by an Israeli startup.
