ServiceNow Inc. is in advanced talks to buy the cybersecurity startup Armis in a deal that may be valued at as much as $7 billion and would represent the tech company’s largest acquisition to date.
A deal may be announced in the coming days, according to people familiar with the situation, asking not to be identified because the talks are private. While discussions are advanced, they may still fall apart or another potential bidder may emerge, the people said.
A spokesperson for ServiceNow declined to comment. A representative for Armis didn’t immediately provide comment.
Shares in ServiceNow closed down around 0.3% in New York trading Friday, giving the Santa Clara, California-based company a market value of about $179.5 billion.
Founded by veterans of Israeli military cyber intelligence, San Francisco-based Armis specializes in identifying and tracking security threats on devices, working across a range of industries, including medical, financial services and defense.
In early August, Armis’ chief executive officer, Yevgeny Dibrov, said the company had reached $300 million in annual recurring revenue, up from $200 million a year ago, and that it was still eyeing a public listing in 2026.
ServiceNow, which provides software that helps companies organize and automate their personnel and information technology operations, has become a dominant platform for enterprise workflow.
The company and other leading technology platforms, such as Salesforce Inc. and Microsoft Corp., have been competing to weave generative artificial intelligence features throughout their products. In March, ServiceNow struck an agreement to buy the AI firm Moveworks Inc. for $2.85 billion as part of its push into AI tools that can complete tasks without human supervision.
A deal for Armis would see ServiceNow follow several peers that have been aggressively embedding cybersecurity products into their own offerings. Google parent Alphabet Inc. in March agreed to acquire cloud security firm Wiz Inc. for $32 billion in cash. In July, Palo Alto Networks Inc. announced its purchase of CyberArk Software Ltd. in a deal valuing the Israeli company at about $25 billion.
What will ServiceNow gain from this acquisition?
The acquisition of Armis will allow ServiceNow to add security visibility and risk management to its platform . This will integrate IT operations, workflows, and security into a single system. This is seen as a significant step toward creating a unified and automated solution for large enterprise customers.
Increasing Demand in the Cybersecurity Market
Cyber attacks and data breaches are constantly increasing globally. This is driving enterprises to increase their security budgets and adopt advanced solutions. Demand for asset-based security and Zero Trust models is growing rapidly, making companies like Armis high-value.
Impact on Competitors and Market
If the deal goes through, ServiceNow’s position in the cybersecurity market will be strengthened. This could pose new competition to companies like Palo Alto Networks, CrowdStrike, and Microsoft. This will further accelerate the platform-based approach to the enterprise security market.
Growing M&A Trend in the Tech Industry
Recently, major SaaS and tech companies have been rapidly acquiring cybersecurity and AI startups. The ServiceNow–Armis deal is seen as part of a global mergers and acquisitions trend that could further consolidate the tech industry in the coming years.
Read more: Armis Hits $300 Million in Annual Revenue on IPO Path
Insight Partners agreed to acquire Armis in 2020 in a $1.1 billion deal that included other investors, such as Alphabet’s CapitalG.
Private equity giant Thoma Bravo had previously eyed a potential deal with Armis, and the startup’s executives said in September that they’d been weighing around six to seven offers from investors for a stake in the company.
This article is for informational and educational purposes only. The information shared here is based on publicly available reports, industry trends, and media sources at the time of writing. Deal values, timelines, and outcomes may change as official announcements are made.
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