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Investing.com -- In a note to clients on Wednesday, analysts at Wedbush called Palo Alto Networks’ $25 billion acquisition of CyberArk a “strategic home run deal,” positioning the cybersecurity giant to reshape the sector with a major push into identity security.
Under the agreement, CyberArk shareholders will receive $45 in cash and 2.2005 shares of PANW stock for each CYBR share, representing a 26% premium to CyberArk’s 10-day average share price.
Wedbush said the acquisition is “a transformational deal that will reshape the cybersecurity market moving forward.”
The acquisition brings Palo Alto into the Privileged Access Management (PAM) and identity security segment, an area where CyberArk is considered the dominant player.
“We view this move as a strategic home run deal by PANW to strengthen its platformization strategy,” Wedbush wrote. “This represents a key strategic poker move by the cyber stalwart.”
Wedbush believes the transaction will be immediately accretive to PANW’s revenue growth and gross margin, with free cash flow per share accretion expected in fiscal 2028 following synergy realisation.
The deal is expected to close in the second half of Palo Alto’s 2026 fiscal year, pending regulatory and board approvals. “We expect no other bidders or regulatory issues,” the analysts added.
“This was both an offensive and defensive move by Nikesh & Co. to accelerate the PANW end-to-end platform strategy,” Wedbush said.
The firm added that the acquisition could prompt further consolidation in the sector, naming Zscaler (NASDAQ:ZS), Check Point, and CrowdStrike (NASDAQ:CRWD) as potential deal targets.
Wedbush also highlighted that CyberArk’s role in the AI ecosystem “should vastly accelerate PANW’s AI efforts.”