Israeli Cybersecurity Firm Varonis Acquired for $6.3 Billion

The veteran Israeli cybersecurity company Varonis, traded on NASDAQ, is being acquired by the American company Proofpoint for approximately $6.3 billion in cash. This represents a 52% premium over its June 2026 share price, when rumors of its sale first surfaced. Proofpoint, the acquiring entity, specializes in end-user and AI agent security and is a private company owned by the private equity firm Thoma Bravo. Varonis, founded in 2004 by Yaki Paitelson, was a pioneer in securing enterprise cloud data and detecting cyber threats using artificial intelligence. The company currently employs 2,800 people, with about a thousand at its development center in Israel. Varonis shareholders, primarily institutional investors like BlackRock and Vanguard, will receive $49.75 in cash per share. This acquisition values Varonis at approximately 53 times its free cash flow and 8.4 times its revenue over the last twelve months ending in June. The sale offers a 240% premium compared to the company's IPO price 11 years ago, though it may represent a loss for those who bought shares at their peak in 2021 or between 2024-2025. This is the second Israeli cybersecurity firm to be delisted this year; the previous one was CyberArk, sold to Palo Alto Networks for $25 billion. Varonis, a dominant player in data security for on-premises cloud infrastructure, has been transitioning towards public cloud infrastructure and a Software as a Service (SaaS) model. However, the rise of AI poses a risk to companies operating under such models. Acquisition by a private equity firm is expected to facilitate Varonis's adaptation to the AI era, potentially at the expense of short-term profitability, and to complement Proofpoint's identity and user management systems with Varonis's strengths in cloud data security posture management (DSPM), a rapidly growing field. The deal is expected to close in the second half of the year.