How the $25B Palo Alto Networks-CyberArk Deal Got here Collectively

The second-largest acquisition in cybersecurity historical past began with an preliminary outreach in 2023. The vendor almost walked away, after which each corporations adopted an accelerated announcement timeline due to media leaks.

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Palo Alto Networks CEO Nikesh Arora first approached CyberArk founder and chairman Udi Mokady a few potential acquisition again in Could 2023, however Mokady stated CyberArk wasn’t and wished to proceed pursuing its standalone technique. CyberArk disclosed Tuesday how Palo Alto’s proposed $25 billion acquisition got here collectively prematurely of a Nov. 13 vote on the deal by the agency’s shareholders.

After a two-year hiatus, Arora instructed Mokady on June 4, 2025, that Palo Alto Networks was concerned with buying CyberArk, and requested an in-person assembly, which befell June 17. The businesses entered right into a mutual nondisclosure settlement on June 25, and Palo Alto Networks submitted a non-binding letter of curiosity on July 1 for an all-stock acquisition of CyberArk at a value of $457.99 per share.

The CyberArk board recognized “the distinct advantages of a possible transaction with PANW as in comparison with different potential acquirers, together with the distinctive strategic rationale for a transaction with PANW, the strategic alignment between CyberArk and PANW and the potential to meaningfully speed up CyberArk’s imaginative and prescient of delivering its main identification safety platform globally and at scale,” CyberArk wrote (see: It is Official: Palo Alto Networks to Purchase CyberArk for $25B).

Closing the Hole on Deal Value, Termination Phrases

The corporate’s board decided on July 4 that contacting different potential acquirers wouldn’t be in the most effective pursuits of CyberArk or its shareholders contemplating the danger of media and trade leaks. Two days later, Mokady delivered to Arora a counterproposal that valued CyberArk’s inventory at $525 per share and included a $2 billion termination payment payable by Palo Alto if the deal does not get regulatory backing.

On July 7, Arora submitted a revised proposal of $480 per CyberArk share and no termination payment since he believed the complementary nature of Palo Alto Networks’ and CyberArk’s companies would not draw the ire of regulators. Mokady countered July 9 with a proposal of $510 per CyberArk share and a $2 billion reverse termination payment, and Arora volleyed again by providing $495 and a $500 million termination payment.

Mokady and Arora met July 10, with the previous telling the latter CyberArk would not preserve negotiating if the termination payment stayed at simply $500 million. Palo Alto Networks agreed to double the termination payment it will pay to $1 billion whereas preserving all different phrases the identical. Mokady instructed Arora that CyberArk would transfer ahead with negotiations, however Arora stated an exclusivity settlement could be wanted to proceed.

In response, CyberArk and Palo Alto Networks on July 12 entered into an exclusivity settlement pledging that the previous would negotiate solely with the latter till Aug. 6. 12 days later, Palo Alto instructed CyberArk it needed to speed up the timeline for signing the deal from Aug. 7 to an earlier date since Calcalist reported on July 21 that Palo Alto was in discussions to purchase one other cybersecurity firm.

“The chance [is] that solicitation of third-party curiosity might result in the sale course of changing into identified to the broader market and deterring PANW [Palo Alto Networks] and inflicting it to withdraw its supply,” CyberArk wrote.

Issues Practically Fall Aside on the Final Minute

On July 27, Arora referred to as Mokady and instructed him Palo Alto’s earlier supply of $495 per share not had the assist of the corporate’s board as a result of adjustments within the corporations’ respective inventory costs, as an alternative submitting a proposal for $475.21 per CyberArk share. Mokady stated Arora’s proposal was unacceptable, and CyberArk instructed its advisors to cease engaged on the Palo Alto Networks transaction later that night.

“The CyberArk board decided that the July 27 proposal was not in the most effective pursuits of CyberArk and the CyberArk shareholders,” CyberArk wrote. “Later that day, representatives of CyberArk despatched a letter to representatives of PANW directing PANW to return or destroy data that had been offered underneath the mutual nondisclosure settlement between the events.”

Palo Alto’s monetary advisor J.P. Morgan reached out to CyberArk’s monetary advisor Qatalyst Companions on July 28 to convey the Palo Alto’s willingness to contemplate a revised supply a $489.45 per CyberArk share, however Mokady and CEO Matt Cohen instructed Qatalyst that CyberArk would doubtless be unwilling to proceed on this foundation. Later that day, Palo Alto representatives despatched a “greatest and ultimate” proposal of $495 per share.

CyberArk’s outdoors authorized counsel famous this draft of the acquisition settlement provided better certainty of closing and contained a $750 million termination payment payable by CyberArk to Palo Alto Networks if the transaction is terminated as a result of the CyberArk board decided to pursue a superior competing proposal. On July 30, CyberArk’s board unanimously permitted the execution and supply of the deal.

Following the CyberArk board assembly, Palo Alto Networks and CyberArk executed the settlement and issued a joint press launch saying the transaction previous to market open on July 30.

“Based mostly on these negotiations and PANW’s indication that its supply was greatest and ultimate, the merger consideration represents the most effective proposal and financial worth obtainable to CyberArk shareholders and that the merger settlement contained probably the most favorable phrases to CyberArk within the mixture to which PANW was keen to agree,” CyberArk wrote.