Latham, Kirkland shepherd CyberArk’s $1.5bn Venafi acquisition

Latham guides CyberArk in acquisition of cybersecurity business from Kirkland-repped Thoma Bravo

Latham & Watkins and Kirkland & Ellis, 2023’s top M&A legal advisors by deal value, are advising on CyberArk’s $1.54bn acquisition of cybersecurity business Venafi from private equity giant Thoma Bravo.

Latham is acting for CyberArk, an identity security services provider based in Massachusetts and Israel, on the deal while Kirkland is advising marquee client Thoma Bravo and Venafi. 

CyberArk will acquire Venafi in a combination of $1bn in cash and around $540m in stock, with the deal expected to close in the second half of 2024.

The Latham cross-border team repping CyberArk is led by London partner Josh Kiernan, Silicon Valley partner Josh Dubofsky and New York partner Leah Sauter alongside Tel Aviv associate Gilad Zohari and New York associates Katherine Cody and Jamie Savren (all M&A).

Meantime Kirkland’s team is led by corporate partners Corey Fox, Bradley Reed and Brett Nelson and associates George Boden and Emily Goldenberg. 

Kirkland has advised Thoma Bravo on numerous matters in recent years, including the firm’s growth investment in Venafi in 2020, which valued the company at $1.15bn at the time. Venafi was repped on the matter by Orrick. 

Kirkland is also acting for Thoma Bravo on the £4.3bn acquisition of UK-listed cyber security company Darktrace, agreed last month, with Latham called in to counsel Darktrace.

CyberArk said the Venafi deal would expand its total addressable market by nearly $10bn to $60bn due to its robust presence in cloud security, adding that the acquisition would be accretive to its margins immediately.

The boards of both the companies have approved the deal, which CyberArk expects will add around $150m in annual recurring revenue. 

“By combining forces with Venafi, we are expanding our abilities to secure machine identities in a cloud-first, GenAI, post-quantum world,” CyberArk chief executive officer Matt Cohen said in a statement. 

CyberArk reported a 37% rise in total revenue to $221.6m in the first quarter, with subscription revenue jumping 69% to just over $156m in the same period. 

Morgan Stanley is serving as exclusive financial advisor to CyberArk on the deal, while Piper Sandler is exclusive financial advisor to Thoma Bravo.

News of the acquisition comes amid a surge in global M&A after dealmaking slumped to a 10-year low in 2023. Global M&A volumes jumped 38% in the first quarter compared to the same period last year to nearly $800bn, according to LSEG, though deals are taking longer to complete amid increased regulatory scrutiny.

Latham placed sixth in the global M&A legal advisor rankings by deal value in the opening three months of the year, working on deals worth $84.9bn. The firm had placed second in the rankings for 2023 behind Kirkland, which advised on deals worth nearly $400bn over the course of the year. Kirkland had fallen to eighth spot at the end of this year’s opening quarter after advising on $80bn of deals.

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