Palo Alto Networks-CyberArk combination is ‘watershed deal’: Analyst

The acquisition of a major identity security vendor provides one of the final missing pieces for Palo Alto Networks’ platform strategy, according to Wedbush’s Daniel Ives

The acquisition of CyberArk by Palo Alto Networks represents a bold strategic move for the cybersecurity giant and its platform strategy, according to a Wall Street analyst.

The deal is by far the largest in the cybersecurity giant’s history.

Identity security vendor CyberArk had a $20bn market capitalisation, and the M&A deal with Palo Alto Networks is worth “well above” that amount, according to the Wall Street Journal.

Daniel Ives, MD and senior equity research analyst at Wedbush Securities, wrote that the Palo Alto Networks-CyberArk combination is a “watershed deal in the cyber security landscape.”

Palo Alto has assembled product capabilities in nearly all of the major cybersecurity segments, and adding identity security constitutes one of the final missing pieces, according to Ives.

A deal for CyberArk serves to “further bolster PANW’s platformisation strategy” and ultimately solidify Palo Alto Networks as an “end to end stalwart,” Ives wrote.

CyberArk specialises in privileged access management as well as identity and access management, identity governance and other categories related to protecting identities.

The company acquired machine identity vendor Venafi for $1.54bn in 2024 and identity governance start-up Zilla Security for as much as $175m in February.

CyberArk has more than 10,000 customers “leveraging its capabilities for identity security and privileged access management to protect businesses’ sensitive information against cyber threats,” Ives wrote, “which [provides] plenty of cross-sell/upsell opportunities for PANW within the space.”

Along with putting Palo Alto “further at the forefront of the cyber industry,” a deal with CyberArk “forces” additional consolidation in the cybersecurity industry, he noted.

Palo Alto has never paid more than $800m for an acquisition in the past, wrote Shaul Eyal, an MD and senior analyst at TD Cowen, in a note to investors last week pertaining the cybersecurity giant’s M&A strategy.

The company has acquired at least 17 companies since 2018, most recently completing its acquisition of Protect AI, a startup focused on AI security, last week.

This article originally appeared on CRN UK sister website CRN.