CyberArk to Acquire Venafi for $1.54 Billion in Cash and Stock Deal
CyberArk, the identity security company, announced on Monday that it has signed a definitive agreement to acquire Venafi, a leader in machine identity management, from Thoma Bravo. The acquisition, valued at approximately $1.54 billion, will be a combination of $1 billion in cash and approximately $540 million in CyberArk shares. The transaction aims to establish a unified platform for end-to-end machine identity security at enterprise scale.
Combining Machine Identity Management and Identity Security Capabilities
The acquisition will combine Venafi’s machine identity management capabilities with CyberArk’s identity security capabilities. Venafi is expected to add approximately $150 million in annual recurring revenue (ARR) and brings a strong business model with 95% in recurring revenue, including SaaS and Term Based License Revenue.
The combination of Venafi’s certificate lifecycle management, private Public Key Infrastructure (PKI), IoT identity management, and cryptographic code signing with CyberArk’s secrets management capabilities will enable organizations to protect against misuse and compromise of machine identities, improve security, and stop costly outages.
The transaction is expected to be accretive to margins immediately, with significant revenue synergies through cross-sell, up-sell, and geographic expansion.
Expanding Total Addressable Market and Driving Innovation
Venafi offers complementary solutions that expand CyberArk’s total addressable market (TAM) by nearly $10 billion to approximately $60 billion. The acquisition marks a pivotal milestone for CyberArk, enabling the company to further its vision of securing every identity – human and machine – with the right level of privilege controls.
Matt Cohen, Chief Executive Officer of CyberArk, stated, “This acquisition marks a pivotal milestone for CyberArk, enabling us to further our vision to secure every identity – human and machine – with the right level of privilege controls.”
Chip Virnig, a Partner at Thoma Bravo, commented, “Venafi has accelerated SaaS growth, expanded margins, and successfully created a best-in-class SaaS offering, setting the stage for continued innovation.”
Transaction Details and Approval
The Boards of Directors of both CyberArk and Venafi have approved the transaction, which is expected to close in the second half of 2024, subject to required regulatory approvals, clearances, and other customary closing conditions.
The acquisition is valued at approximately $1.54 billion, with CyberArk paying $1 billion in cash and approximately $540 million in shares. Venafi is majority-owned by Thoma Bravo and was valued at $1.15 billion when the private equity firm bought its controlling stake in 2020.
A Significant Step Forward in Identity Security
CyberArk’s acquisition of Venafi represents a significant step forward in the company’s mission to secure every identity, both human and machine, with the right level of privilege controls. By combining Venafi’s machine identity management capabilities with CyberArk’s identity security expertise, the company aims to create a comprehensive platform for end-to-end machine identity security at enterprise scale.
The acquisition is expected to drive innovation, expand CyberArk’s total addressable market, and provide immediate accretive benefits to margins. As the transaction moves towards closing in the second half of 2024, the cybersecurity industry will be closely watching to see how this strategic combination unfolds and the impact it will have on the ever-evolving landscape of identity security.
