10:12 AM EDT, 05/20/2024 (MT Newswires) -- CyberArk Software ( CYBR ) said Monday that it agreed to acquire machine identity management company Venafi from Thoma Bravo in a cash-and-stock deal carrying an enterprise value of roughly $1.54 billion.

Under the terms, identity security company CyberArk will pay about $1 billion in cash for Venafi and approximately $540 million in shares. The transaction, which requires approval from regulators, is expected to complete in the second half.

"By combining forces with Venafi, we are expanding our abilities to secure machine identities in a cloud-first, (generative artificial intelligence), post-quantum world," CyberArk Chief Executive Matt Cohen said in a statement. "We are thrilled to work with the Venafi team to capitalize on the tremendous growth opportunity in the identity security market."

CyberArk expects the acquisition to expand its total addressable market by almost $10 billion to $60 billion, driven by Venafi's certificate lifecycle management, internet of things identity management and cryptographic code signing offerings.

CyberArk estimates the deal to add about $150 million in annual recurring revenue and be immediately accretive to margins. Earlier in May, CyberArk reported that it recorded a 34% annual jump in first-quarter annual recurring revenue to $811 million.

"Over the course of our investment, Venafi has accelerated (software-as-a-service growth), expanded margins, and successfully created a best-in-class SaaS offering," said Chip Virnig, a partner at Thoma Bravo. "We believe CyberArk is a great partner for Venafi and that the scaled end-to-end machine identity security platform created by this strategic combination will deliver significant value to shareholders."

Thoma Bravo, a private equity firm focused on software companies, made a strategic investment in Venafi at the end of 2020.

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