Israeli Cyber Firm Varonis Sold for $6.3 Billion to Perforce

Cybersecurity company Varonis Systems, an Israeli firm founded over 20 years ago, has been acquired by U.S.-based Perforce Software for approximately $6.3 billion in cash. The acquisition is being facilitated by investment firm Thoma Bravo, which previously purchased Perforce in 2021 for $12.3 billion. The deal values Varonis at $49.75 per share, a 52% premium over its June stock price, following earlier reports of a potential sale. This transaction concludes a challenging period for Varonis, marked by a significant stock decline, slowed growth, and a lengthy transition to a cloud-based software-as-a-service model. Varonis, established in 2005 by Yaki Fitelzon and Ohad Korokus, specializes in helping organizations manage and secure sensitive data by identifying critical files, monitoring access, detecting suspicious behavior, and restricting unnecessary permissions. The increasing reliance on artificial intelligence has amplified the importance of data security, as organizations integrate internal data with AI systems that perform autonomous actions.

Perforce, which focuses on protecting email, users, and digital identities, is expected to integrate Varonis's capabilities to offer a more comprehensive security system. The combined entity will serve over 16,000 large organizations and millions of additional customers globally. For Thoma Bravo, this acquisition aligns with its strategy of building large cybersecurity groups through acquisitions. The firm has invested billions in the sector and has a presence in Israel through its portfolio companies. Perforce itself has a history of acquiring Israeli cybersecurity firms, including Illusive, ObserveIT, and MantisNet, and maintains a significant R&D presence in Israel. Varonis currently employs approximately 2,800 people worldwide, with about 1,000 based in Israel.

The deal is anticipated to close in the first half of 2027, pending regulatory and shareholder approvals. Until then, both companies will continue to operate independently. Despite Varonis's accounting losses, the acquisition price reflects its substantial revenue growth, with revenues reaching $180 million in the second quarter of 2026, an 18% increase year-over-year. Cloud-based recurring revenues reached $726 million annually, a 52% increase. However, the reported growth rate of 25% excluding customer migration to the cloud offers a clearer picture of genuine expansion. While Varonis reported an operating loss of $40.6 million under GAAP in Q2 2026, it generated approximately $69 million in free cash flow in the first half of the year. The acquisition price represents a multiple of about 8.4 times trailing twelve-month revenues and 53 times annual free cash flow, indicating Thoma Bravo's expectation of future growth and profitability improvements. Varonis's stock experienced volatility, including a more than 30% drop in October 2025 following disappointing earnings and lowered forecasts, partly due to the short-term impact of its transition to cloud subscriptions. The deal price is about 5% higher than Varonis's closing stock price before the latest reports, reflecting the time until closing and associated risks.