Key Takeaways:
- The Proofpoint Varonis acquisition involves cybersecurity company Proofpoint agreeing to buy data security firm Varonis Systems for about $6.3 billion in cash.
- Varonis shareholders will receive $49.75 per share under the deal.
- The combined company will serve more than 16,000 business customers worldwide.
Cybersecurity company Proofpoint announced Thursday that it had agreed to buy data security firm Varonis Systems in an all-cash deal worth about $6.3 billion. The deal aims to expand the protection services the companies offer businesses.
Proofpoint Agrees to Buy Varonis for $6.3 Billion
Proofpoint will pay about $6.3 billion in cash to acquire Varonis Systems. Under the agreement, Varonis shareholders will receive $49.75 for each share they own. This is 52% more than Varonis’s closing share price on June 22, the last full trading day before reports of the deal first appeared.
Proofpoint is owned by private equity firm Thoma Bravo. Thoma Bravo has committed to providing equity and debt financing to help pay for the purchase. Ontario Teachers’ Pension Plan has also agreed to invest in Proofpoint as part of the deal.
Once the deal closes, Varonis will become a private company, and its shares will stop trading on the Nasdaq stock exchange. Varonis’s board unanimously approved the agreement. The deal is expected to close in the first half of 2027, pending shareholder approval, regulatory clearance, and other standard closing conditions.
Deal Expands Data Protection for Business Customers
The Proofpoint Varonis acquisition will bring together Proofpoint’s security tools for protecting people and communications with Varonis’s tools for protecting company data. The combined business will serve more than 16,000 large business customers and millions of organizations worldwide. Company executives said the deal would create a major cybersecurity company focused on data and artificial intelligence.
After the deal closes, Proofpoint plans to combine the companies’ products and align their sales efforts. The goal is to offer a single platform that helps businesses reduce data loss and protect sensitive files. Until the deal is complete, both companies will continue to operate separately.
Executives said wider use of AI tools at work creates new security risks. By connecting information about communications, user accounts, access rights, and data, the combined company aims to help customers spot risks faster. Its platform is also expected to protect data stored in cloud services and used in workplace apps.
Financial and Legal Advisers Support the Deal
Goldman Sachs served as Varonis’s financial adviser, while Paul Hastings provided legal advice. Varonis CEO Yaki Faitelson said the board had carefully reviewed its options and approached potential buyers. He said the cash deal offers shareholders a clear payment for their shares.
As part of the Proofpoint Varonis acquisition, Proofpoint received financial advice from BofA Securities, Morgan Stanley, JPMorgan, UBS, and Mizuho Securities USA. Kirkland & Ellis served as its legal adviser. Proofpoint CEO Sumit Dhawan said controlling access to data is increasingly important as businesses adopt new technology.
Varonis plans to report its third-quarter financial results on November 3 but will not hold an earnings call because of the pending sale. Both companies will file the required documents as they prepare for shareholder votes in the coming months.
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