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1Repair Windows errors before they cause bigger problems2Fix the driver behind crashes, sound loss and screen glitches3Clear out junk files and repair common Windows errorsPalo Alto Networks announced on March 24, 2014, that it would acquire privately held cybersecurity company Cyvera for approximately $200 million. The deal added endpoint exploit-prevention technology to Palo Alto Networks’ network-and-cloud security platform. It legally closed on April 9, 2014; Palo Alto Networks announced its completion the next day.
What did Cyvera do?
Based in Tel Aviv, Cyvera developed endpoint technology designed to block unknown, zero-day attacks. Rather than relying only on identifying malware after it runs, its approach focused on preventing attackers from exploiting software weaknesses on computers and other endpoints.
Palo Alto Networks said Cyvera had 55 employees when the acquisition was announced. Its co-founders and co-CEOs were Uri Alter and Netanel Davidi. Cyvera was backed by Battery Ventures, Blumberg Capital and angel investors.
How much did Palo Alto Networks pay?
The announced transaction value was approximately $200 million. That headline amount is distinct from the lower figure Palo Alto Networks later recorded for accounting purposes.
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| Figure | What it represents | Source and qualification |
|---|---|---|
| Approximately $200 million | Announced transaction value | Palo Alto Networks, 2014 |
| Approximately $88 million cash and $112 million in stock | Announced consideration mix | U.S. Securities and Exchange Commission investor presentation, 2014 |
| Approximately $89 million cash and 1,556,925 newly issued shares | Consideration reported at closing, subject to adjustments contemplated by the purchase agreement | U.S. Securities and Exchange Commission Form 8-K, 2014 |
| Approximately $177.6 million | Total consideration recorded for accounting purposes; included acquired developed technology and goodwill | Palo Alto Networks fiscal 2014 Form 10-K |
The figures describe different stages and purposes: the $200 million amount was the announced headline value, while the $177.6 million figure was the company’s accounting measure. The latter should not be treated as a replacement for the announced transaction value.
Why did Palo Alto Networks buy Cyvera?
The acquisition extended Palo Alto Networks’ security strategy beyond its network firewalls. The company described a platform in which its next-generation firewall handled network policy, WildFire provided cloud-based threat intelligence, and Cyvera’s technology addressed exploit prevention on endpoints.
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That combination offered a way to sell endpoint protection alongside products to Palo Alto Networks’ existing customer base. In its 2014 investor presentation, the company said the deal could reach more than 16,000 existing end-customers and expand its addressable market by more than $4 billion. Those were company-presented estimates of cross-selling opportunity and market size, not reported sales or guaranteed revenue from the acquisition.
CEO Mark McLaughlin said on March 24, 2014: “With this acquisition, we are pleased to add Cyvera’s next-generation technology to the Palo Alto Networks enterprise security platform.” Cyvera’s co-CEOs, Alter and Davidi, said the companies would work together to help enterprise customers address advanced threats.
When did the acquisition close?
Palo Alto Networks announced the agreement on March 24, 2014. The transaction legally closed on April 9, according to its closing filing, and the company announced completion on April 10.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to interpret the deal
The acquisition is best understood as a platform-expansion deal: Palo Alto Networks added an endpoint prevention layer to existing network and cloud capabilities, with cross-selling into its customer base as part of the strategic case. For comparing it with other cybersecurity acquisitions, the useful distinctions are where the target’s product acts (network, cloud or endpoint), how the buyer pays (cash, stock or both), how mature the target is, and whether the stated rationale is platform expansion or new recurring revenue. In this case, the available figures describe a 55-person company, a mixed cash-and-stock transaction, and an endpoint product; they do not establish post-acquisition revenue attributable to Cyvera.
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