Palo Alto Networks Acquires Israeli Start-Up Cyvera For $200 Million

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Cyvera Founders

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Santa Clara, California, based Palo Alto Networks announced today it has signed an agreement to acquire the privately held Israeli cyber-security company Cyvera, which is based in Tel Aviv.

Under the terms of the agreement, New York Stock Exchange listed Palo Alto Networks will buy all the outstanding shares of Cyvera for an aggregate purchase price of about US$200 million.

The deal is now expected to close in the second half of Palo Alto Networks current fiscal year, which ends on October 31st, 2014, subject to the usual customary closing and regulatory conditions typical of such transactions.

Palo Alto Networks will now add Cyvera’s cyber-security products to its own comprehensive enterprise security platform. Cyvera currently has 55 employees and, according to the purchaser, has developed a product offering that protects enterprises from cyber threats by using a proprietary approach to block even unknown, zero-day attacks on the end point.

The addition of Cyvera’s capability to the Palo Alto Networks enterprise security platform is expected to extend their customers’ ability to safely enable applications and protect users against, known and unknown, cyber threats on any device, and across any network.

Mark McLaughlin, President and CEO of Palo Alto Networks said of the deal, “This event marks a key milestone in our strategic enterprise security vision.”

“It enables us to accelerate the delivery of the market’s only highly integrated and automated enterprise security platform spanning network, endpoints, and the cloud. For customers, this translates into the most sophisticated and automated threat prevention for their entire organization.”

Uri Alter and Netanel Davidi, the two co-founders and co-CEOs of Cyvera, themselves said about being acquired, “Much like Palo Alto Networks set out to disrupt the network security market with its next-generation security platform, we founded Cyvera to revolutionize protection for the endpoint – one of the most vulnerable frontiers for cyber attacks.”

“We are pleased to join the Palo Alto Networks team and together help enterprise customers tackle the advanced threats they face today.”

The founder and Chief Technology Officer of Palo Alto Networks is also Israeli, Nir Zuk who formed the company in 2005. Before going public the company had excellent venture capital support from Greylock Partners and Sequoia Capital, both of whom still have representatives on the Board of Directors. Sequoia today still owns almost 19% of the company and founder Nir Zuk himself just 4.3%. Palo Alto Networks today has a market capitalization of US$5.6 billion.

Obviously cyber-security is a terrific hot button for network managers. Increasingly, too, it is one where buying peace of mind may now drive purchases by IT managers without too much concern for price, even in a competitive market. Just a few years ago it had been something of an orphan, by comparison, despite the presence of plenty of risk along the way.

Cyvera has it seems developed a unique method of performing real-time prevention against all core attack techniques at the endpoint; during the exploitation phase, before the malware has a chance to run and before knowledge of vulnerability of a piece of software is even established.

This is after all where the term zero-day is said to come from, – i.e. from the moment the hacker has found a vulnerability which may be long before the software maker even knows there is a weakness. Even so, the term is semantically still a little curious.

Sophisticated security attacks increasingly rely on a combination of tactics and threat vectors to penetrate an organization. Dealing with this effectively therefore requires a new approach to security, one that Palo Alto Networks has been offering and which will now likely improve even further with its Cyvera acquisition.

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