Cybersecurity giant Palo Alto Networks set to acquire CyberArk in a $25 billion deal
Palo Alto Networks has announced a major acquisition, agreeing to purchase CyberArk for a total deal value of $25 billion. This move significantly intensifies competition in the cybersecurity industry around identity security threats and marks Palo Alto Networks' formal entry into the identity security market.
Nikesh Arora, chairman and CEO of Palo Alto Networks, stated that the company's market entry strategy is to enter categories at their inflection point, and they believe that moment for identity security is now. The merged company will represent Palo Alto Networks' entry into the identity security space, leveraging CyberArk’s leadership in privileged access management and identity security.
CyberArk's areas of expertise strongly complement Palo Alto Networks' independent security platform approach. The combined company will be a core part of Palo Alto Networks' multi-platform strategy, enhancing their offerings in the critical area of identity security. This is particularly important in the current landscape, where 90% of breaches involve stolen or mismanaged credentials, as noted by Arora.
The acquisition is expected to close during the second half of Palo Alto Networks' fiscal year. Upon completion, CyberArk shareholders will receive $45 and 2.2005 shares of Palo Alto Networks common stock for every share they own.
The deal is expected to increase Palo Alto Networks' revenue growth and gross margins. By integrating CyberArk’s capabilities into its Strata and Cortex platforms, Palo Alto can offer identity-aware security with faster enterprise response, raising the competitive bar against other identity security vendors.
The impact on competition includes an expanded market presence for Palo Alto Networks, positioning itself as a comprehensive security provider beyond firewalls. The acquisition creates a major player with a broad portfolio, likely prompting other cybersecurity firms to bolster their identity security solutions via innovation or acquisitions to keep pace.
Customers benefit from a single trusted vendor that can deliver more comprehensive protection focused on identity as the new security perimeter. The acquisition amplifies rivalry among providers focused on securing identity and access in the evolving threat landscape, accelerating the industry's shift toward identity-centric cybersecurity approaches.
Forrester believes that identity security is foundational to modern cybersecurity, and the acquisition will reshape not only the Identity and Access Management (IAM) landscape but also the broader cybersecurity industry. Geoff Cairns, principal analyst at Forrester, stated that the acquisition will reshape the industry, noting that historically, identity has been separated into privileged access management (PAM) and IAM.
However, the deal is subject to approval by federal regulators and CyberArk shareholders. Once approved, the acquisition will likely reshape the future of the cybersecurity industry's competition to manage identity security threats.
