Proofpoint in talks to acquire Israeli cybersecurity company Varonis
Varonis shares jumped more than 10% following reports of the talks, pushing its market value to $5.37 billion.
American cybersecurity company Proofpoint is in discussions to acquire Israeli cybersecurity company Varonis Systems, according to The Wall Street Journal and Reuters. The potential deal would bring together two established players in the cybersecurity market under the ownership of Thoma Bravo, one of the world’s largest technology-focused private equity firms and an active investor in the sector.
The value of the potential transaction is not currently known. Varonis had a market capitalization of roughly $5 billion before the reports emerged, and its shares jumped more than 10% on Wednesday, bringing the company’s market value to approximately $5.37 billion. The rally suggests investors expect a potential acquisition to come at a premium to Varonis’ pre-announcement valuation.
Thoma Bravo declined Reuters' request for comment, while Proofpoint and Varonis did not immediately respond.
Varonis has developed a cloud-based data security platform that continuously identifies and classifies critical data, removes exposures and detects threats using artificial intelligence-powered automation. The company is headquartered in Miami and employs more than 2,400 people across 14 global offices, most of them outside Israel.
Varonis was founded in 2004 and is led by co-founder Yaki Faitelson, who serves as CEO, chairman and president. The company went public in 2014 and has experienced significant ups and downs as it transitioned from its traditional software model toward a software-as-a-service (SaaS) business.
It is expected to generate approximately $735 million in revenue in 2026, representing growth of about 18%, while operating profit is expected to reach $11 million to $13 million. Its relatively weak profitability compared with its revenue growth has been one of the issues weighing on the stock in recent years, as the company has absorbed the costs of shifting toward a recurring-revenue SaaS model.
The potential acquisition would also deepen Thoma Bravo’s presence in cybersecurity. The private equity firm agreed in 2021 to acquire Proofpoint and take it private in a transaction that valued the company at approximately $12.3 billion.
