Cybersecurity company Palo Alto Networks is buying CyberArk in a cash-and-stock deal valued at approximately $25 billion.

CyberArk, which is based in Petach-Tikva, Israel, develops software that detects attacks on privileged accounts.

CyberArk shareholders will receive $45 in cash and 2.2005 shares of Palo Alto Networks common stock for each share of CyberArk that they own.

Palo Alto Networks Inc. said Wednesday that the transaction will give it access to the identity security market.

Palo Alto Networks’ Chairman and CEO, Nikesh Arora, announced that their market entry approach has always been to tap into sectors at key turning points, and they believe the time has come for identity security. This method has successfully shifted their focus from being a next-gen firewall company to becoming a leading force in multi-platform cybersecurity.

Dan Ives, a Wedbush analyst, described the acquisition as a “strategic home run,” noting in a client note that Palo Alto Networks aims to create a comprehensive cyber solutions hub to tackle the increasing AI threats while integrating this tech into their wider offerings.

Meanwhile, CyberArk announced its financial outcomes, showing a 46% increase in revenue during the second quarter. Adjusted earnings of 88 cents per share surpassed the average analyst forecasts.

This announcement marks the latest acquisition in the cybersecurity sector this year. Previously, in March, Google revealed a $32 billion agreement to purchase cybersecurity company Wiz, poised to be the tech giant’s largest acquisition to date.

The agreement between Palo Alto Networks and CyberArk has been unanimously approved by both boards and is projected to finalize in the second half of Palo Alto Networks’ fiscal 2026. The deal still requires the consent of CyberArk shareholders to proceed.

Shares of Palo Alto Networks, which is based in Santa Clara, California, dropped nearly 8% in morning trading. CyberArk’s stock declined 1.8%.