Palo Alto ready to pay to be cyber supermarket

“The Wall Street Journal” reported yesterday that cybersecurity company Palo Alto Networks (Nasdaq: PANW) was in negotiations for the acquisition of Israeli company CyberArk Software (CYBR) in a deal that could be worth over $20 billion. According to the report, an agreement between the parties could be signed this week, but the companies made no official response. If the deal does go ahead, it will be one of the biggest technology deals of 2025, and the largest acquisition made by Palo Alto so far.

Palo Alto Networks has been profitable and growing almost since it was founded. In the past twelve months, its share price has risen by 23%, but by only 8% in 2025 to date. After carrying out large acquisitions in Israel and elsewhere, it realized that it was missing out on one area in which there was especially lively merger and acquisition activity: management of employee access to enterprise systems, a critical branch of cybersecurity in the prevention of ransomware attacks, whereby hackers penetrate an organization using details of employees, encrypt or block databases, and demand a ransom in the millions of dollars to release them.

At first, there were rumors of an acquisition of SentinelOne (NYSE: S), a company founded by Israelis in the US, whose share price rose as a result. Yesterday, its share price fell, and CyberArk rose instead, closing 13.47% up on the day, thanks to the reports about negotiations for an acquisition by Palo Alto, which itself closed 5.21% off yesterday.

A cyber supermarket

Palo Alto Networks, the second largest cybersecurity company after Microsoft, is regarded as the most sophisticated supermarket of cybersecurity products, built through a combination of acquisitions and original developments.

It started out as a company that protects enterprise networks, expanded to protection of cloud networks, and made acquisitions in Israel in enterprise browser security (Talon Cyber Security) and databases (Dig Security).

Despite this, it struggled to present an integrated, robust solution in identity management. “Palo Alto Networks operates in this field via other products, such as database security, that is to say, management of access to databases, but it has never had a suite of products for it,” Demi Ben-Ari, co-founder and chief strategy officer of cybersecurity company Panorays told “Globes.” “Nikesh Arora, Palo Atlo’s CEO, and Nir Zuk, its founder, want to turn the company into the biggest cybersecurity supermarket in the world, in which customers – enterprise data security managers – will be able to find everything they need in one place, and to that end they’re prepared to pay a premium. The thesis is proven: every time a plan for such an acquisition is reported, Palo Alto’s share price falls by a few percentage points, but, in the test of time, the acquisition only boosts the share price in the long term.”

CyberArk, a company more than twenty years old, has demonstrated that it is capable of growing gradually, avoiding the many obstacles in its way, and chiefly that it knows how to make major acquisitions in its field that have made it the largest company in identity management. Over the years it has bought fifteen companies, a buying spree that reached a peak last year when it bought its biggest rival, Venafi, for $1.6 billion, an acquisition that contributed to a doubling of CyberArk’s market cap. Today, the company is worth just a little less than veteran Israeli cybersecurity company Check Point (Nasdaq: CHKP).

Buying CyberArk is an obvious move for Palo Alto, which needs to bolster its status as the ultimate cybersecurity supermarket and strengthen itself against giants like Microsoft and Google (which has raised its head through the acquisition of Wiz), and against CrowdStrike, which has also armed itself with a series of cybersecurity company acquisitions, many of them Israeli, in the past year.

And what about the acquisition of SentinelOne? The assessment is that it isn’t necessarily a matter of a deal that has been cancelled – there is no overlap between its field, endpoint security, and identity management. In one great gulp, Palo Alto could swallow both companies. Palo Alto Networks currently has a market cap of $130 billion. It is not totally imaginary to see it rising above $200 billion next year, if the US regulator lets it.

Published by Globes, Israel business news – en.globes.co.il – on July 30, 2025.

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