SentinelOne announces acquisitions of Prompt Security and Observo with equity issuance

SentinelOne, Inc. (NYSE:S), a cybersecurity company with a market capitalization of $6.25 billion and strong revenue growth of 25% year-over-year, reported Monday that it has completed the acquisition of Prompt Security, Inc. and entered into an agreement to acquire Observo, Inc., according to a statement based on a recent SEC filing. According to InvestingPro analysis, the company appears undervalued based on its Fair Value calculation.

The company finalized the Prompt Security transaction on Friday. Under the terms of the merger agreement signed August 5, SentinelOne paid approximately $180 million in a mix of cash and Class A common stock. As part of this consideration, 1,555,099 shares of Class A common stock were issued. The company’s strong financial position, with more cash than debt and a healthy current ratio of 1.83, supports these strategic acquisitions. Certain portions of the cash and stock consideration have been held back to secure indemnification obligations of some Prompt Security shareholders.InvestingPro subscribers have access to detailed financial health scores and 12+ additional investment tips for SentinelOne, helping investors make informed decisions about the company’s growth strategy.

SentinelOne also disclosed that it entered into an agreement Monday to acquire Observo, Inc. The consideration for the Observo transaction will total approximately $225 million, payable at closing in a combination of cash and Class A common stock. The agreement includes an estimated 5,263,157 shares of Class A common stock, with 2,453,886 shares subject to vesting conditions after the closing. While the company is not currently profitable, analysts tracked by InvestingPro expect profitability this fiscal year. The company expects to complete the Observo transaction in its third quarter of fiscal year 2026, subject to regulatory approvals and customary closing conditions.

Both equity issuances were made solely to accredited investors and relied on exemptions from registration under the Securities Act of 1933, including Section 4(a)(2), Regulation D, and, in the case of the Prompt Security transaction, Regulation S.

SentinelOne’s Class A common stock is listed on the New York Stock Exchange under the ticker NYSE:S. The information in this article is based on a company press release statement filed with the SEC.

In other recent news, SentinelOne has announced its intention to acquire Observo AI, a data streaming platform, to enhance its data pipeline capabilities. This acquisition, expected to conclude in the third quarter of fiscal year 2026, will involve a mix of cash and stock, pending regulatory approvals. SentinelOne also reported strong financial performance, with its Annual Recurring Revenue reaching $1.001 billion, surpassing the consensus estimate of $985 million and marking a 24% increase from the previous year. Following these results, DA Davidson raised its price target for SentinelOne to $19, maintaining a Neutral rating.

Additionally, TD Cowen reiterated its Buy rating with a $24 price target, citing platform expansion and improved guidance for the second half of the year. In partnership news, SentinelOne has teamed up with Schwarz Digits to offer a sovereign AI-powered cybersecurity platform for European customers, focusing on data sovereignty and compliance. Meanwhile, the company launched Managed AI Defense, a new cybersecurity program for small and mid-sized businesses, developed with Pax8. These developments reflect SentinelOne’s ongoing efforts to expand its offerings and strengthen its market position.

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