ServiceNow, Inc. ( NOW ) shares traded lower on Tuesday. The company disclosed an acquisition of Armis in an all-cash deal of $7.75 billion.

As per the agreement, ServiceNow ( NOW ) will acquire Armis for about $7.75 billion in cash, funded through cash on hand and debt.

The deal, pending regulatory approvals, is expected to close in the second half of 2026, with Armis' team joining ServiceNow ( NOW ).

As of September 30, ServiceNow ( NOW ) had cash and cash equivalents of $2.73 billion.

Merger Benefits

Armis is known for cyber exposure and cyber-physical security. Armis protects IT, operational technology, medical devices, and other critical environments for enterprises, governments, and infrastructure worldwide.

The acquisition will strengthen ServiceNow's ( NOW ) security workflow capabilities, enabling AI-native, proactive cybersecurity and automated vulnerability response across all connected devices.

Combined, ServiceNow ( NOW ) and Armis will deliver an end-to-end security operations stack that integrates real-time asset discovery, threat intelligence, risk prioritization, and automated remediation across the entire technology ecosystem.

Notably, security remains the top priority for CEOs amid rising AI adoption, with global spending on information security projected to reach $240 billion in 2026, up 12.5%.

The Armis acquisition will boost ServiceNow's ( NOW ) Security, Risk, and OT portfolios, enhancing trust in connected environments and driving AI adoption.

With ServiceNow's ( NOW ) Security and Risk business surpassing $1 billion ACV in the third quarter of 2025, this move is expected to more than triple its security market opportunity and accelerate autonomous, proactive cybersecurity capabilities.

Management Commentary

Amit Zavery, president, chief operating officer, and chief product officer at ServiceNow ( NOW ), added, "In the agentic AI era, intelligent trust and governance that span any cloud, any asset, any AI system, and any device are non-negotiable if companies want to scale AI for the long-term. Together with Armis, we will deliver an industry-defining strategic cybersecurity shield for real-time, end-to-end proactive protection across all technology estates. Modern cyber risk doesn't stay neatly confined to a single silo, and with security built into the ServiceNow AI Platform, neither will we."

Price Action: NOW shares are down 2.59% at $152.62 at the last check on Tuesday.

Read Next:

TikTok Parent ByteDance To Invest $23 Billion In AI To Compete With US Tech Giants: Report