Israeli Cyber Firm Varonis Acquired by Proofpoint for $6.3 Billion
Israeli cybersecurity firm Varonis is being acquired by American company Proofpoint for $6.3 billion in cash. Varonis shareholders will receive $49.75 per share, representing a 52% premium over pre-rumor trading prices.
Israeli cyber security company Varonis (Nasdaq: VRNS), specializing in data security and artificial intelligence, is being acquired for $6.3 billion by American cybersecurity firm Proofpoint in an all-cash transaction. Following the announcement, Varonis shares rose by nearly 3% in after-hours trading on Nasdaq. Proofpoint specializes in user and AI-agent security and is part of the Thoma Bravo private equity portfolio.
Acquisition Details and Financial Terms
Under the terms of the agreement, Varonis shareholders will receive $49.75 in cash for each share. The purchase price represents a 52% premium over Varonis's closing share price on June 22, which stood at $32.71—the last full trading day before initial rumors of a potential sale—and a 17% premium over the closing price on September 1, which stood at $42.35, prior to subsequent media reports. The transaction values Varonis at a multiple of approximately 53 on free cash flow and a multiple of about 8.4 on revenue for the 12 months ending in June.
Varonis, founded in 2004, has developed a cloud-based platform for enterprise data security that continuously identifies and classifies critical data, reduces exposure, and detects threats using AI-driven automation. The company employs roughly 2,800 people worldwide, including about 1,000 in Israel, where its development center is located. In recent years, Varonis stock has suffered from weakness primarily stemming from a slow transition from a legacy business model to software-as-a-service (SaaS) product sales.
Future Outlook and Leadership Statements
The deal is expected to close in the first half of 2027, subject to shareholder approval, necessary regulatory clearances, and other customary closing conditions. To finance the acquisition, Thoma Bravo has committed to providing equity financing as well as debt financing commitments. Until the transaction is completed, Proofpoint and Varonis will continue to operate as separate and independent companies. Upon completion, Varonis shares will be delisted from Nasdaq and the company will become private.
"Today marks an exciting new chapter for Varonis and our customers. This is a testament to the exceptional work of the Varonis team over two decades. Our mission is to secure artificial intelligence and the data that drives it, and by joining forces with Proofpoint, we will be able to accomplish this mission faster than ever before," said Yaki Faitelson, co-founder and CEO of Varonis.
Sumit Dhawan, CEO of Proofpoint, added: "As the use of artificial intelligence expands in organizations, the data available to it determines both the utility it can bring and the risks it may create. AI agents are exposed to more sensitive information and perform actions across corporate systems, making comprehensive data security vital."
