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Palo Alto Networks agreed in March 2014 to buy Cyvera, an endpoint-security company, for approximately $200 million. The deal added technology designed to block unknown, zero-day attacks on endpoints to Palo Alto Networks’ network-and-cloud security platform. The acquisition legally closed on April 9, 2014; the company announced its completion the next day.
What did Cyvera do?
Cyvera was a privately held cybersecurity company based in Tel Aviv. Its technology aimed to prevent attacks by blocking exploit techniques on endpoint devices, including techniques associated with unknown, zero-day attacks. That focus differed from relying only on identifying malware after it had run.
Palo Alto Networks described Cyvera as a way to extend protection from the network and cloud to the endpoint. The company’s next-generation firewall enforced network policy, its WildFire service provided cloud-based threat intelligence, and Cyvera supplied endpoint exploit prevention. The acquisition announcement named Cyvera co-founders and co-CEOs Uri Alter and Netanel Davidi.
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Why did Palo Alto Networks buy Cyvera?
The acquisition was part of Palo Alto Networks’ effort to extend its security platform beyond network firewalls. Combining network controls, cloud threat analysis and endpoint exploit blocking was intended to help enterprises prevent attacks at multiple points in the attack chain.
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The company also presented the purchase as a growth opportunity: its investor presentation said the deal could be cross-sold to more than 16,000 existing end-customers and expand its addressable market by more than $4 billion. Those figures were Palo Alto Networks’ strategic estimates in 2014, not measures of later sales or realized market growth. The SEC-filed investor presentation lays out the platform rationale.
At the time, Palo Alto Networks CEO Mark McLaughlin said the acquisition would add Cyvera’s next-generation technology to the company’s enterprise security platform. Cyvera’s co-CEOs said joining Palo Alto Networks would help enterprise customers address advanced threats.
How much did Palo Alto Networks pay?
The announced transaction value was approximately $200 million. The announced figure and the consideration later reported at closing differ in detail, and the accounting value recorded afterward was lower; these figures describe different stages and measures of the transaction.
| Measure | Reported amount | What it describes |
|---|---|---|
| Announced transaction value | Approximately $200 million | Palo Alto Networks’ March 2014 headline value. |
| Announced cash-and-stock mix | Approximately $88 million cash and $112 million in Palo Alto Networks stock | The SEC investor presentation’s description of the proposed consideration. |
| Closing consideration | Approximately $89 million cash and 1,556,925 newly issued shares | The closing Form 8-K figures; the purchase agreement contemplated adjustments. |
| Accounting consideration | Approximately $177.6 million | The amount recorded in Palo Alto Networks’ fiscal 2014 Form 10-K for accounting purposes, alongside acquired developed technology and goodwill. |
The headline value is therefore the clearest answer to what Palo Alto Networks said it would pay, while the filing figures explain the cash-and-stock components and subsequent accounting treatment. The SEC-filed presentation, closing Form 8-K and fiscal 2014 Form 10-K report these distinct measures.
When did the acquisition close?
Palo Alto Networks announced the agreement on March 24, 2014. The transaction legally closed on April 9, 2014, and the company announced completion on April 10. The dates distinguish the signing announcement from the legal closing and public completion notice.
Who was Cyvera, and how mature was the company?
Cyvera had 55 employees when Palo Alto Networks announced the acquisition. It was backed by Battery Ventures, Blumberg Capital and angel investors. Its co-founders and co-CEOs were Uri Alter and Netanel Davidi. The company described the target as a technology addition to its enterprise platform; the cited deal materials do not establish later product performance or commercial results.
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How to compare this deal with another cybersecurity acquisition
For a useful comparison, separate the product rationale from the financial and accounting measures. The Cyvera transaction can be assessed across these dimensions:
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- Prevention point: Cyvera focused on endpoint exploit blocking, complementing Palo Alto Networks’ network firewall and cloud analysis.
- Consideration mix: The announced mix was approximately $88 million cash and $112 million stock; closing filings report approximately $89 million cash and 1,556,925 shares, with contractual adjustments contemplated.
- Target maturity: Cyvera was a privately held company with 55 employees, backed by named venture investors and angel investors.
- Integration thesis: Palo Alto Networks emphasized platform expansion and cross-selling to its installed customer base, rather than presenting the rationale solely as a standalone product purchase.
- Value measure: Keep the approximately $200 million announced transaction value distinct from the approximately $177.6 million accounting consideration recorded in the fiscal 2014 Form 10-K.
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