CyberArk shares surged 13% on Tuesday following a report from The Wall Street Journal that Palo Alto Networks is in talks to acquire the identity management software firm in a deal exceeding $20 billion.
The acquisition would mark the largest to date for Palo Alto Networks and CEO Nikesh Arora, who “has been on a buying spree in recent years.” Since taking the helm in 2018, Arora has led the cybersecurity giant through a series of acquisitions, including Protect AI earlier this year, and Talon Cyber Security, Dig Security, and Zycada Networks in 2023.
“By extending our AI security capabilities to include Protect AI’s innovative solutions for Securing for AI, businesses will be able to build AI applications with comprehensive security,” said Anand Oswal, senior vice president and general manager of network security at Palo Alto Networks, in a release at the time.
“CyberArk would represent by far his biggest bet,” the Journal reported. The Israeli-based firm, public since 2014, specializes in helping companies manage secure logins to applications — a market increasingly vital amid the rise of AI-driven threats and ransomware attacks.
Founded in 2005, Palo Alto Networks has grown into the largest cybersecurity company by market capitalization, valued at about $132 billion. CyberArk, now with a market cap nearing $21 billion after Tuesday’s rally, is up 29% year-to-date following a 52% surge in 2024.
Competition in the identity and access management space is fierce. CyberArk goes head-to-head with tech giants like Microsoft, Okta, IBM’s HashiCorp, and SailPoint, which reentered the public markets earlier this year.
Neither Palo Alto Networks nor CyberArk commented on the report.
In the first quarter, CyberArk posted $11.5 million in net income on $318 million in revenue — a 43% year-over-year jump.
The cybersecurity M&A landscape has been active. In March, Google announced a $32 billion deal for Wiz, its biggest acquisition ever, aimed at bolstering AI-driven cloud security. Cisco also made waves in 2023 with its $28 billion purchase of Splunk, enhancing its ability to help enterprises monitor and secure their data.
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