CyberArk Software Ltd. (NasdaqGS:CYBR) signed a definitive agreement to acquire Venafi, Inc. from Thoma Bravo, L.P. for an enterprise value of $1.5 billion on May 19, 2024. The total enterprise value for the transaction is $1.54 billion in a combination of cash (approximately $1 billion) and Company stock (approximately $540,000,000). Subject to the terms and conditions of the Merger Agreement, all of the common stock of Venafi issued and outstanding as of the time of the Merger (the ?Effective Time?) will be canceled and converted into the right to receive (i) an aggregate amount in cash of $856,000,000 and (ii) 2,285,076 ordinary shares of the Company. The ordinary shares of the Company will be issued to Seller without registration under the Securities Act of 1933 in reliance on the private offering exemption provided by Section 4(a)(2) thereof. The aggregate amount in cash of $856,000,000 is net of certain adjustments related to items such as Venafi debt, long-term obligations and cash balance. Venafi is expected to add approximately $150 million annual recurring revenue (ARR). The transaction is expected to be accretive to margins immediately2, with significant revenue synergies through cross-sell, up-sell and geographic expansion.

The consummation of the Merger is subject to customary closing conditions, including, among others, the following conditions to the obligations of both the Company and Venafi: (i) the expiration or termination of any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder, (ii) the approval of the Committee on Foreign Investment in the United States; (iii) the Merger having not been enjoined or otherwise prohibited by any applicable law or any writ, decree, decision, consent, stipulation, award, order, judgment, injunction, temporary restraining order or other order of any governmental authority; (iv) the truth and correctness of the other party?s representations and warranties in the Merger Agreement, subject in certain cases to a materiality or material adverse effect standard; and (v) performance, in all material respects, of the other party?s obligations in the Merger Agreement required to be performed at or prior to the consummation of the Merger. In addition, the consummation of the Merger is subject to the following closing condition to the obligations of the Company: (i) the absence of a ?Company Material Adverse Effect? (as defined in the Merger Agreement) with respect to Venafi and its Subsidiaries and (ii) receipt of the consent of Seller, as the sole stockholder of Venafi, approving the Merger. The transaction is expected to close in the second half of 2024, subject to required regulatory approvals, clearances and other customary closing conditions. The Boards of Directors of both CyberArk and Venafi have each approved the transaction.

Morgan Stanley & Co. LLC is serving as exclusive financial advisor to CyberArk and Latham & Watkins LLP is serving as legal counsel to CyberArk. Brian White and Bryant Williams of Piper Sandler is serving as exclusive financial advisor to Thoma Bravo and Kirkland & Ellis LLP is serving as legal counsel to Thoma Bravo.