Varonis Shares Jump on Report of Possible Sale to Private Equity

Varonis shares rose 7.1% on Tuesday, even as Wall Street, and especially the Nasdaq, traded lower. The move followed a Bloomberg report that the Israeli cybersecurity company is exploring a sale and has drawn early interest from private equity firms. Varonis, led by co-founder Yaki Faitelson, provides data protection and data management tools for enterprises.

The company’s market value on Nasdaq stands at $4.1 billion. Its stock has climbed 73% from its April low, but it is still down 29% over the past year and 52% below its 2021 peak. Varonis went public in 2014 at a valuation of about $500 million. Bloomberg said three firms have shown initial interest, Blackstone, Thoma Bravo and Vista Equity Partners.

The sale talk comes amid the AI boom, which has made it easier for attackers to find vulnerabilities and launch faster, more sophisticated cyberattacks. The article notes two major cybersecurity deals last year, Google’s $32 billion purchase of Wiz and Palo Alto Networks’ $25 billion acquisition of CyberArk. Blackstone manages more than $1.3 trillion in assets, Thoma Bravo about $172 billion, and Vista about $103 billion.

Varonis is also in the middle of a business transition as customers move from on-premises contracts to SaaS subscriptions, which affects results. Last October it shocked investors by cutting its 2025 annual forecast, and the stock nearly halved that day. In the first quarter, revenue rose 26.9% to about $173 million, including $161 million from SaaS, up 81.8%, while annual recurring revenue grew 69% to $683 million. The company posted a net loss of $36.9 million, but a $7.5 million adjusted profit, beat expectations, ended the quarter with about $900 million in cash, and carried roughly $453 million in long-term debt tied to convertible bonds.

Varonis also bought SlashNext and AllTrue.ai for an estimated combined $275 million over the past year, while also repurchasing its own shares. IBI analyst Rudi Shetwey said the rise of remote work and AI has changed the case for the company, making data leakage and cyber exposure more severe. If a deal happens, the article says it would likely come at a significant premium to the current share price.