CyberArk Announces Acquisition of Venafi in a $1.54 Billion Deal

CyberArk (NASDAQ: CYBR), a leader in identity security, has signed a definitive agreement to acquire Venafi, a frontrunner in machine identity management, from Thoma Bravo. This strategic acquisition aims to integrate Venafi's robust machine identity management capabilities with CyberArk's leading identity security solutions, forming a comprehensive platform for end-to-end machine identity security on an enterprise scale.

CyberArk plans to acquire Venafi for approximately $1.54 billion, comprising $1 billion in cash and $540 million in CyberArk shares. The transaction has been approved by the Boards of Directors of both companies and is expected to close in the second half of 2024, subject to regulatory approvals and customary closing conditions.

Founded in 1999 in Israel, CyberArk is a global leader in identity security, specializing in protecting against cyber threats that exploit privileged accounts. Headquartered in Newton, Massachusetts, the company initially focused on safeguarding privileged access in on-premises environments. Over the years, CyberArk has expanded its offerings to address the complexities of cloud and hybrid environments, providing comprehensive security solutions that protect against advanced cyber threats. With a robust portfolio that includes privileged access management, secrets management, and endpoint security, CyberArk serves a diverse range of industries, helping organizations secure their most critical assets.

The acceleration of digital transformation and ongoing cloud migration has led to an exponential increase in machine identities, such as workloads, code, applications, IoT devices, and containers. The number of machine identities now surpasses human identities by a significant margin, with more than 40 machine identities for every human identity. These identities, if left unprotected, present a lucrative target for cybercriminals. Effective management, security, and automation of machine identities are crucial to safeguarding their connections and communications, a task complicated by shorter certificate lifecycles and the need to be quantum-ready.

A report by Forrester highlights the growing importance of machine identity management. Historically, enterprises have focused less on managing machine identities compared to human identities due to different requirements and lifecycle challenges. However, the exponential growth in machine identities has increased the urgency to improve management strategies to mitigate risks associated with this expanded threat surface.

The acquisition will combine Venafi’s expertise in certificate lifecycle management, private Public Key Infrastructure (PKI), IoT identity management, and cryptographic code signing with CyberArk’s secrets management capabilities. This will provide organizations with a robust defense against the misuse and compromise of machine identities, significantly enhancing security and preventing costly outages. The integrated solution, available as SaaS or hybrid, aims to offer rapid risk mitigation for organizations seeking to secure modern cloud environments.

Venafi’s strengths in PKI and certificate management, particularly within cloud environments, complement CyberArk’s offerings. This merger expands CyberArk’s total addressable market (TAM) by nearly $10 billion, reaching approximately $60 billion.

“This acquisition is a pivotal milestone for CyberArk, allowing us to secure every identity—human and machine—with appropriate privilege controls,” said Matt Cohen, CEO of CyberArk. “By joining forces with Venafi, we enhance our capabilities to secure machine identities in a cloud-first, GenAI, post-quantum world. Our combined technologies and expertise will meet the needs of global enterprises, empowering CISOs to combat sophisticated attacks leveraging human and machine identities. We are excited to welcome Venafi's world-class team, who share our customer-centric and security-first mindset, to capitalize on the immense growth opportunity in the identity security market.”

Chip Virnig, Partner at Thoma Bravo, expressed confidence in the strategic combination, noting, “Our partnership with Venafi has solidified its position as a leader in machine identity management. Under our investment, Venafi has accelerated SaaS growth, expanded margins, and created a best-in-class SaaS offering. CyberArk is an ideal partner for Venafi, and this strategic combination will deliver significant value to shareholders.”