American enterprise software company $ServiceNow (NOW.US)$ announced on Tuesday that it will acquire cybersecurity startup Armis in an all-cash transaction valued at approximately USD 7.75 billion. ServiceNow stated that this acquisition will significantly enhance its cybersecurity capabilities in the AI era and expand the total addressable market for its security and risk solutions to more than three times its current size.
ServiceNow stated in the announcement that the transaction is expected to be completed in the second half of next year, with funding sourced from a combination of cash and debt. Following the announcement, the company's stock price fell more than 2% during early trading.
Amit Zavery, President and Head of Products and Operations at ServiceNow, stated that the combination of the two companies will create an 'industry-defining' strategic cybersecurity protection system, providing real-time, end-to-end, proactive protection for various technology assets.
Earlier this month, reports indicated that Armis was exploring a potential deal with ServiceNow at a valuation of approximately USD 7 billion. Headquartered in California, Armis primarily helps businesses protect connected devices from cyber risks. The company announced in November this year that it had completed a USD 435 million financing round, with a post-money valuation of USD 6.1 billion.
At the time, Yevgeny Dibrov, co-founder of Armis, stated in an interview that while the company originally planned to pursue an IPO in 2026 or 2027, its core objective was to increase annual recurring revenue (ARR) to over USD 1 billion. He noted that the demand for network exposure management and security platforms is continuously rising, with a 'unique and significant' need for related tools.
As the IPO market gradually recovers amidst volatility, an increasing number of companies are opting to delay their listings or exit through acquisitions. Large tech companies, including Stripe and Databricks, have received substantial funding support in the private equity market in recent years.
Against the backdrop of accelerated AI adoption, enterprises are continuously ramping up investments in cybersecurity to address increasingly complex cyber threats. This year has also seen active mergers and acquisitions in the cybersecurity sector, including $Alphabet-C (GOOG.US)$ acquiring cloud security startup Wiz for USD 32 billion, and $Palo Alto Networks (PANW.US)$ acquiring CyberArk for USD 25 billion.
ServiceNow also disclosed that Armis’s current annual recurring revenue has exceeded USD 340 million, representing a year-over-year growth of 50%, up from the USD 300 million level disclosed in August this year, demonstrating the continuous strengthening of its business scale and growth momentum.
Editor/Doris