10:19 AM EDT, 07/30/2025 (MT Newswires) -- Palo Alto Networks ( PANW ) will acquire CyberArk (CYBR) in a $25 billion deal that would see the cybersecurity company enter the identity security space amid an artificial intelligence-driven surge in machine identities.

CyberArk's investors will receive $45 in cash and 2.2005 shares of Palo Alto Networks ( PANW ) for each share owned in the Israeli identity security provider, the companies said in a joint statement on Wednesday. The consideration represents a 26% premium to CyberArk's 10-day average price as of Friday.

Palo Alto's shares declined 8.3% in Wednesday trade, while CyberArk fell 2.4%.

"Our market entry strategy has always been to enter categories at their inflection point, and we believe that moment for identity security is now," Palo Alto Chief Executive Nikesh Arora said in the statement. "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."

Machine identities likely represents a bigger market than human identities, "driven by the exponential growth in machines," Truist Securities said on Tuesday in a note.

The deal represents a key move by Palo Alto to strengthen its platformization strategy amid rising competition for cyber solutions, according to a Wednesday note from Wedbush Securities.

The cybersecurity industry could see more deals, including Zscaler ( ZS ) , Check Point Software Technologies ( CHKP ) and Crowdstrike ( CRWD ) as Palo Alto "heads down this path with enterprises looking to build out end-to-end platforms that hit on multiple parts of the cyber landscape," Wedbush analysts, including Daniel Ives, wrote.

Palo Alto said it expects the transaction to be immediately accretive to revenue growth and gross margin. The deal is projected to close during the second half of its fiscal 2026, subject to regulatory clearance and approval by CyberArk's shareholders.

Separately, CyberArk on Wednesday reported adjusted earnings of $0.88 per share for the second quarter, down from $0.54 in the same period last year. The FactSet-polled consensus pointed to $0.79. Revenue increased 46% to $328 million, higher than Wall Street's $316 million view.

Price: 177.52, Change: -16.33, Percent Change: -8.42