Veteran Israeli cybersecurity firm Varonis Systems (Nasdaq: VRNS), which is traded on Nasdaq, is being acquired by US company Proofpoint for $6.3 billion in cash, representing a 52% premium over its price in June 2026, when rumors regarding its sale first surfaced.
Currently, the company has a market cap of $5.43 billion. The buyer, Proofpoint, which specializes in securing end-users and AI agents, is held by private equity firm Thoma Bravo.
Employs 2,800 people
Varonis was co-founded by its CEO and chairperson Yaki Faitelson in 2004 as a data security system within the enterprise cloud. It was a pioneer in detecting cyber threats through the use of artificial intelligence. Today, it employs 2,800 people, about 1,000 of whom are based at its development center in Israel.
Varonis’s shareholders, mostly institutional investors such as BlackRock and Vanguard, will receive $49.75 in cash per share. This represents a 16% premium over the current price. The deal values Varonis at approximately 53 times its free cash flow and roughly 8.4 times its revenue for the 12-month period ending in June of this year. While the sale price embodies a 240% premium over the company’s valuation in its IPO 11 years ago, it may represent a loss for investors who purchased the stock during its peak in 2021, or during 2024-2025.
This marks the second Israeli cybersecurity company to be delisted from the stock exchange this year. The previous instance involved CyberArk, which was acquired by Palo Alto Networks, which is listed on the New York Stock Exchange, for $25 billion. That transaction coincided with Palo Alto’s listing on the Tel Aviv Stock Exchange.
Complementing Proofpoint
Varonis, a dominant player in data security for on-premises and cloud infrastructure, has long been in the midst of a transition toward public cloud infrastructure and a business model based on monthly and annual software licenses (SaaS). However, the rise of artificial intelligence poses risks to companies operating under such a model.
Acquisition by a private fund will make it easier for it to adapt to the AI era, wherever necessary even at the cost of profitability, and to complement Proofpoint (an identity and user management system) with the assets it brings to the table: cloud data security infrastructure (DSPM - data security posture management). This is a rapidly growing sector, featuring players ranging from unicorns like Cyera to industry giants like Palo Alto Networks.
"Today begins an exciting new chapter for Varonis and our customers. It's a testament to the incredible work of the Varonis team over two decades," Faitelson said. "Our mission is to secure AI and the data that powers it. By joining forces with Proofpoint, we can achieve this mission faster than ever.
"This announcement follows a comprehensive evaluation led by a committee of independent members of our board of directors, which included extensive outreach to a range of potential strategic and financial buyers. This transaction is an excellent outcome for the company and our shareholders, representing a realization of immediate, significant, and certain value well in excess of the risk-adjusted value of delivering against our standalone plan."
Published by Globes, Israel business news - en.globes.co.il - on October 16, 2026.
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