What is the News About?
CyberArk, the identity security company, has announced it has signed a definitive agreement to acquire Venafi, a leader in machine identity management, from Thoma Bravo. This acquisition will combine Venafi’s best-in-class machine identity management capabilities with CyberArk’s leading identity security capabilities to establish a unified platform for end-to-end machine identity security at an enterprise scale.
Digital transformation and ongoing cloud migration have increased exponentially in machine identities, such as workloads, code, applications, IoT devices and containers. The number of machines is rapidly outpacing the growth in their human counterparts, with more than 40 machine identities for every human identity. Left unprotected, they serve as a lucrative hunting ground for cybercriminals. These machine identities must be discovered, managed, secured and automated to keep their connections and communications safe. This is made more complex by shorter certificate lifecycles, from 398 to 90 days, and the need to be quantum-ready.
According to Forrester, “Historically, enterprises have taken less interest in managing machine identities compared with human identities, in part because machine identities present different requirements and more complicated lifecycle challenges. However, the exponential growth of machine identities, both for devices and cloud workloads, has brought attention and urgency to improving machine identity management to reduce the risks stemming from this expanded threat surface. Machine identity growth will outpace human identities, necessitating advanced and automated approaches to effectively manage machine identities and associated risks.”
Why is this News Important?
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, vastly improve security, and stop costly outages. Having a breadth and depth of options for machine identity security all in one solution – that can be deployed as SaaS or hybrid – will enable faster risk mitigation for organizations of all sizes looking to secure modern cloud environments.
As an innovative leader in PKI and certificate management with a robust presence in modern cloud environments, Venafi offers complementary solutions that expand CyberArk’s total addressable market (TAM) by nearly $10 billion to approximately $60 billion.
What does the Proposed Acquisition Include?
CyberArk intends to acquire Venafi for an enterprise value of approximately $1.54 billion in cash and CyberArk shares (approximately $1 billion in cash and approximately $540 million in shares). The Boards of Directors of both CyberArk and Venafi have each approved the transaction.
The transaction is expected to close in the second half of 2024, subject to required regulatory approvals, clearances and other customary closing conditions. Other details include:
- Venafi is expected to add approximately $150 million in annual recurring revenue (ARR).
- Venafi brings a strong business model with 95% in recurring revenue, including SaaS and Term Based License Revenue.
- The transaction is expected to be accretive to margins immediately, with significant revenue synergies through cross-sell, up-sell and geographic expansion.
- Venafi brings complementary capabilities to protect machine identities and expands the Total Addressable Market (TAM) from $50 billion to $60 billion.
FAQs
1. What are machine identities, and why do they need protection?
Machine identities refer to the identities of workloads, code, applications, IoT devices, and containers. These identities need protection because, if left unprotected, cybercriminals can exploit them. Protecting machine identities involves discovering, managing, securing, and automating their connections and communications, especially given the complexity added by shorter certificate lifecycles and the need for quantum-ready security.
2. How will this acquisition of Venafi by CyberArk benefit organizations?
Organizations will benefit from a unified solution for machine identity security that combines Venafi’s certificate lifecycle management, private PKI, IoT identity management, and cryptographic code signing with CyberArk’s secrets management capabilities. This integration will help protect against misuse and compromise of machine identities, improve security, and enable faster risk mitigation. The solution will be available as SaaS or hybrid, catering to organizations of all sizes.
3. How will the acquisition impact CyberArk’s market position?
The acquisition will expand CyberArk’s total addressable market (TAM) by nearly $10 billion, increasing from $50 billion to $60 billion. Venafi’s complementary solutions will enhance CyberArk’s presence in modern cloud environments, providing significant revenue synergies through cross-selling, up-selling, and geographic expansion.
4. When will the acquisition be completed?
The acquisition is expected to close in the second half of 2024, subject to obtaining the necessary regulatory approvals and clearances and fulfilling customary closing conditions.
5. What are the financial details of the acquisition?
CyberArk will acquire Venafi for an enterprise value of approximately $1.54 billion, which includes around $1 billion in cash and $540 million in CyberArk shares. This strategic investment aims to significantly enhance CyberArk’s capabilities and market presence in the machine identity management sector.
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