The cash-and-stock splurge was orchestrated by Palo Alto Networks chief executive Nikesh Arora, the ex-SoftBank high-flier once tipped as Masayoshi Son’s heir apparent. Since grabbing the reins in 2018, Arora has led a spree worth more than $7 billion, with this CyberArk buyout easily his priciest move so far.

Palo Alto has been frantically snapping up anything with a whiff of cyber defence lately, mostly to bulk up against threats supercharged by artificial intelligence. It shelled out more than $1.1 billion for IBM’s QRadar SaaS arm and lobbed $700 million at Protect AI, another outfit feeding on the AI security frenzy.

CyberArk slots neatly into that narrative, flogging identity security and privileged access management tools to more than 10,000 global customers. Its software fences off access to sensitive corporate data, especially from rogue insiders or unpatched bots gone wild.

Palo Alto’s pitch is that this plugs a major hole in its lineup. Analysts reckon the deal lets the company flog an end-to-end security package that secures not just humans but AI “agents” rattling around networks unsupervised.

Palo Alto Networks chief executive Nikesh Arora said, “Our market entry strategy has always been to enter categories at their inflection point, and we believe that moment for identity security is now. The rise of AI and the explosion of machine identities have made it clear that the future of security must be built on the vision that every identity requires the right level of privilege controls.”

CyberArk shareholders are getting $45 in cash and just over 2.2 shares of Palo Alto stock for each share they hold, which puts a 26 per cent premium on the 10-day average up to 25 July. CyberArk shares soared on the news and are up nearly 70 per cent over the past year. Palo Alto’s own shares took a kicking, dropping eight per cent, bringing its market cap to around $120 billion.

CyberArk was co-founded by executive chair Udi Mokady in 1999 and went public on Nasdaq in 2014. Mokady said on Wednesday that teaming up with Palo Alto would “bring unmatched expertise across human and machine identities.”