Palo Alto's $25 billion deal for CyberArk targets rising AI-driven threats
Wednesday's cash-and-stock deal, one of the largest tech takeovers this year, underscores a consolidation in the cybersecurity industry as customers streamline vendors after facing breaches while relying on a patchwork of firms.
It follows Alphabet's (GOOGL.O), opens new tab $32 billion acquisition of Israeli startup Wiz in March, and will broaden Palo Alto's cybersecurity offerings by adding identity security tools, bolstering its appeal to large enterprise customers.
A surge in cyberattacks, including data breaches and ransomware, has driven demand for more comprehensive defenses. That has fueled interest in firms including CyberArk.
Earlier this month, Microsoft (MSFT.O), opens new tab said hackers broke into its on-premises SharePoint servers, hitting more than 100 groups including U.S. agencies and fanning fears about identity protection.
"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," Arora said in a statement.
CyberArk specializes in privileged access management, technology that helps organizations safeguard sensitive systems by limiting and monitoring access to critical accounts. Its customers include Carnival Corp (CCL.N), opens new tab, Panasonic and Aflac.
The Israeli company's investors will receive $45.00 in cash and 2.2005 shares of Palo Alto for each share they own.
That values CyberArk at $495 a share, representing a 29.2% premium to Monday's close, the last session before reports of deal talks, according to Reuters calculations.
Palo Alto shares fell 8%, while CyberArk slipped 2.2% to around $424 after jumping 13.5% on Tuesday.
Analysts said the drop in Palo Alto shares reflected investor concerns about post-acquisition integration, given that it has usually targeted smaller deals of less than $1 billion.
"It's a bit of an unknown territory for Palo Alto," said Imtiaz Koujalgi, Roth Capital Partners' managing director of software research.
"Also, Palo Alto talks about integrating its acquisitions into its platform, but given the scale of CyberArk and installed base that could be a challenge."
Palo Alto has completed more than 14 acquisitions since 2019, including at least seven in the past two years, to bolster its cloud and AI security capabilities.
CyberArk reported revenue of about $1 billion for 2024, up 33% year-over-year, but its loss increased by about $27 million to $93.5 million as expenses jumped.
The latest buyout could accelerate Palo Alto's AI security push, as it can tap its large sales force to drive adoption of CyberArk's tools, seen as vital for securing AI systems.
"It helps broaden the portfolio since Palo Alto does not have any offering in the 'identity' space," said Koujalgi, adding the deal could also provide a boost to the company's slowing next‑generation security business.
Global cybersecurity spending is set to grow 12.2%, opens new tab in 2025, as rising AI-driven threats push companies to adopt stronger defenses, according to IDC.
Palo Alto said the buyout is expected to close in the second half of its fiscal year 2026 and would immediately add to its revenue growth and margin.
Analysts do not expect tough antitrust scrutiny for the deal, given the little overlap in the companies' services, but they said it could accelerate M&A in the sector.
One Israeli company seemed to rebuff that idea for now. Check Point Software Technologies (CHKP.O), opens new tab said earlier in the day it was not looking to be bought out like some local rivals.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
3 minutes ago
- The Independent
Trump threatens India with 50% tariffs for buying Russian oil
U.S. President Donald Trump 's had signed an executive order subjecting Indian imports to a 50% tariff due to its purchase of Russian oil. The order subjects Indian imports to an additional 25% in duties on top of an existing 25% tariff. Indian Prime Minister Narendra Modi has been urged by India's opposition parties and the general public to stand up to Trump, labelling the move as 'bullying'. Trump has been warned his latest tirade threatens to undo two decades of diplomatic progress, analysts and officials say, and could derail other areas of cooperation as domestic political pressures drive both sides to harden their stances. While India has emerged in recent years as a key partner for Washington in its strategic rivalry with China, its large U.S. trade surplus and close relations with Russia – which Trump is seeking to pressure into agreeing to a peace agreement with Ukraine – have made it a prime target in the Republican president's global tariff offensive. Trump's taunt that India could buy oil from arch enemy Pakistan has also not gone down well in New Delhi, said two Indian government sources. India has also rejected repeated claims by Trump that he used trade as a lever to end a recent military conflict between India and Pakistan. In an unusually sharp statement this week, India accused the U.S. of double standards in singling it out for Russian oil imports while continuing to buy Russian uranium hexafluoride, palladium and fertiliser. On Wednesday, it called the tariffs "unfair, unjustified and unreasonable," vowing to "take all actions necessary to protect its national interests." But New Delhi knows that any further escalation will hurt it in matters beyond trade, said the sources. Unlike China, India does not have leverage like supplies of rare earths to force Trump's hand to improve the terms of any trade deal, they said. In recent years, successive U.S. administrations, including Trump's first, carefully cultivated relations with India with an eye on it as a vital partner in long-term efforts to counter the growing might of China. But analysts say Trump's recent moves have plunged the relationship back to possibly its worst phase since the U.S. imposed sanctions on India for nuclear tests in 1998. "India is now in a trap: because of Trump's pressure, Modi will reduce India's oil purchases from Russia, but he cannot publicly admit to doing so for fear of looking like he's surrendering to Trump's blackmail," said Ashley Tellis at Washington's Carnegie Endowment for International Peace. "We could be heading into a needless crisis that unravels a quarter century of hard-won gains with India." Indian state refiners have in recent days stopped buying Russian oil as discounts narrowed and pressure from Trump rose, Reuters has reported. New challenges for relations A more pressing challenge for India, analysts say, is the stark divergence between its priorities and Trump's political base on key issues such as work visas for tech professionals and offshoring of services. India has long been a major beneficiary of U.S. work visa programs and the outsourcing of software and business services, a sore point for Americans who have lost jobs to cheaper workers in India. Relations with India risk becoming a "football in American domestic politics," warned Evan Feigenbaum, a former senior State Department official under the Republican presidency of George W. Bush. "Issues that directly touch India are among the most partisan and explosive in Washington, including immigration and deportation, H1B visas for tech workers, offshoring and overseas manufacturing by U.S. companies, and technology sharing and co-innovation with foreigners," he wrote in a LinkedIn post. Since a 2008 deal to cooperate on civilian nuclear technology, the two countries have deepened intelligence sharing and defence cooperation and expanded interactions with Australia and Japan through the Quad grouping aimed at containing China's dominance in the Indo-Pacific. But fractures have appeared, despite Modi's rapport with Trump in his first term and then former President Joe Biden. Images in February of Indians deported by the U.S. on military planes, their hands and legs shackled, horrified the country just days before Modi went to see Trump seeking to stave off high tariffs. The relationship was also seriously tested in late 2023 when the U.S. said it had foiled a plot with Indian links to kill a Sikh separatist leader on U.S. soil. New Delhi has denied any official connection to the plot. "The Modi regime's credibility in the U.S. has gone down," said Sukh Deo Muni, a former Indian diplomat and a professor emeritus at New Delhi's Jawaharlal Nehru University. "And maybe there are people who think that India or Modi had to be brought back on track, if not taught a lesson. And if that trend continues, I'm quite worried that the challenge is quite powerful and strong for India to navigate." Strengthening ties with US rivals One Indian government source said India needs to gradually repair ties with the U.S. while engaging more with other nations that have faced the brunt of Trump tariffs and aid cuts, including the African Union and the BRICS bloc that includes Brazil, Russia, China and South Africa. India is already making some moves with Russia and China. Russian President Vladimir Putin is expected to visit New Delhi this year and on Tuesday, Russia said the two countries had discussed further strengthening defence cooperation "in the form of a particularly privileged strategic partnership." India has also boosted engagement with China, a change after years of tensions following a deadly border clash in 2020. Modi is set to visit China soon for the first time since 2018. "Russia will attempt to exploit the rift between the U.S. and India by proposing the restoration of the Russia-India-China trilateral and new projects in defence," said analyst Aleksei Zakharov at the Observer Research Foundation in New Delhi.
The Independent
3 minutes ago
- The Independent
Trump slashed Medicaid — now he's got another health care crisis looming
President Donald Trump and congressional Republicans are trying to sell the American public on their ' One Big, Beautiful Bill ' despite the fact many Americans, and even members in their own conference, worry about the cuts to Medicaid. Most voters do not trust Trump on health care and fear the significant cuts to Medicaid. Republicans already face hostile voters in their town halls when it comes to health care. But as if that were not a big enough problem, Trump and the Republicans face another looming crisis that could cause health care prices to spike. And it comes from an old political enemy: The Affordable Care Act, Barack Obama's signature health care law. 'I think there's going to be a lot of sticker shock of people who aren't following this debate in Congress and are going to be stunned by just how much their rates go up, because the premiums will increase substantially,' Jonathan Oberlander, a professor of social medicine at the University of North Carolina-Chapel Hill, told The Independent. In 2022, then-Senate Majority Leader Chuck Schumer brokered a deal with now former senator Joe Manchin for the Inflation Reduction Act. As part of the agreement, the bill extended an expansion of subsidies to the Affordable Care Act that initially passed under the American Rescue Plan Act, Joe Biden's signature piece of legislation to provide relief during the Covid-19 pandemic. Under the Affordable Care Act, also known as Obamacare, people who might not have health insurance under their employer but are not eligible for Medicaid can purchase health care on state exchanges. If they earn an income below a certain threshold, they could be eligible for tax credits. 'They might not get employer-sponsored health care, but they're like realtors or entrepreneurs or small business owners or Uber drivers,' one former Capitol Hill aide who now works in health care told The Independent. 'These folks – going to the exchanges trying to purchase their health insurance, they're on the precipice of seeing a big cost of living increase.' The subsidies initially passed under the ARPA, and then later under the IRA, increased eligibility for people making up to 400 percent of the Federal Poverty Line. But they expire at the end of the calendar year. Oberlander said it could create a cost crisis. 'It's going to affect people in the sense that the pool will become smaller, and therefore, depending on who leaves, because it depends – the people are leaving healthier or sicker than the average, it can destabilize the pools to some extent.' he said. 'And people are going to read about it and see it, and they're going to feel it and they're going to pay it, and I think there would be a lot of anger.' Sen. Thom Tillis (R-N.C.), who will not seek re-election in 2026, said Republicans could extend the package, specifically in a year-end spending package. 'I've got to believe that that may become a discussion and the year end appropriations, at least some sort of a short term extension, so they can sort it out,' he told The Independent last week before recess. The government runs out of funding for the fiscal year at the end of September. Open enrollment for the health insurance marketplaces typically begins in November. But Democrats are not as confident. 'Here we are trying to fix all the things that they broke,' Sen. Tina Smith (D-Minn.) told The Independent. 'You've got Republican senators introducing bills to undo the things that they just passed.' There's evidence this could have massive consequences for patients. In December 2024, the nonpartisan Congressional Budget Office warned that 2.2 million Americans could lose their health insurance by 2026 if the extended subsidies expired. It also warned that 3.7 million people could lose coverage by 2027. Still, some Republicans said that they do not want to make a fix. 'Obamacare is doing so much damage to our healthcare system, to our federal budget, I don't want to renew any part of it. quite honestly,' Sen. Ron Johnson (R-Wisc.) told The Independent. 'We need to repair the damage done by Obamacare.' But Trump might not have a choice. Polling shows that health care is one of the few policies where voters still trust Democrats more than Republicans. 'This is not the same ACA that he ran against in 2016, it covers many more people, both through Medicaid and in the marketplace,' Oberlander said. 'It's much more popular than it was, and if his administration and congressional Republicans are seen as gutting the health insurance marketplaces and raising people's millions of people's premiums, that's bad politics, and it's bad politics at a time when he already has a fairly low approval rating.'
The Independent
3 minutes ago
- The Independent
Trump border czar reacts after Indy 500 track boss demands end to ‘Speedway Slammer' moniker for new migrant detention center
Trump border czar Tom Homan appeared to have no idea Wednesday when asked who was behind the name 'Speedway Slammer,' given to a new migrant detention center in Indiana. 'I don't name the facilities,' Homan told reporters. "I don't want the names taken over the great work they're doing,' Homan said of immigration officers. 'This is serious work and it's dangerous work." The Trump administration is working to build out a vast network of migrant detention centers across the country, and recently opened a facility in the Florida Everglades, known as 'Alligator Alcatraz.' It was constructed in weeks, using hundreds of tents, trailers, and other temporary facilities. It's set to hold as many as 3,000 detainees. On Tuesday, Homeland Security Secretary Kristi Noem wrote on X: 'COMING SOON to Indiana: The Speedway Slammer. Today, we're announcing a new partnership with the state of Indiana to expand detention bed space by 1,000 beds. Thanks to @GovBraun for his partnership to help remove the worst of the worst out of our country. If you are in America illegally, you could find yourself in Indiana's Speedway Slammer. Avoid arrest and self deport now using the @CBP Home App.' Then, the official DHS account on X shared an image of what appeared to be an AI-generated Indy car with Immigration and Customs Enforcement branding. The car was branded with the number 5, which has been used by the only Mexican IndyCar driver, Pato O'Ward, since 2020. On Wednesday, Penske Entertainment, the owner of the Indianapolis Motor Speedway, said the company did not want its intellectual property used alongside the detention center. 'We were unaware of plans to incorporate our imagery as part of the announcement,' the company told IndyStar in a statement. 'Consistent with our approach to public policy and political issues, we are communicating our preference that our IP not be utilized moving forward in relation to this matter.' Penske Entertainment hasn't publicly demanded a retraction, and it hasn't issued a cease-and-desist order to stop the use of the imagery and name. The 'Speedway Slammer' will be located at Miami Correctional Facility, a maximum-security prison at the former Grissom Air Force Base, 70 miles north of Indianapolis in Bunker Hill. The 1,000 beds that will be made available represent roughly a third of its total capacity. Immigration advocates have grown frustrated with the sheer amount that's unknown about the 'Speedway Slammer.' Gurinder Kaur, CEO of the Immigrant Welcome Center, told WTHR: "How will this become actualized? We still don't know yet. And what will the cost of this be on our communities? The emotional cost and the economic cost?" On August 1, Indiana Governor Mike Braun confirmed that his state had entered into a partnership with federal immigration authorities in connection with the state's Department of Homeland Security, the Indiana Department of Corrections, the Indiana State Police, and the state's National Guard to aid the federal government 'in deporting individuals who are unlawfully in the U.S.' Braun said the Department of Corrections is working alongside ICE to free up as many as 1,000 beds at the Miami Correctional Facility. "When it comes to our state, we're going to cooperate ... as we're housing detainees that have broken the law after they entered illegally, we're going to cooperate with the federal government," the governor told IndyStar. "When it comes to any of the other issues on due process and so forth, we want to make sure we're doing that the right way as well." Braun's commitment comes as Homan called on states to play a bigger part in federal immigration enforcement. 'States should play a role in this administration's efforts to remove public safety threats from this nation as quickly as possible,' Homan also said Wednesday. 'I've said from day one, we need 100,000 beds.'
