The Information : Palo Alto Networks Finalizing $600 Million-Plus Acquisition of Israeli Startup
Palo Alto Networks is close to acquiring Israeli startup Talon Cyber Security in a deal that could value it at $600 million to $700 million, according to two people familiar with the discussions. The deal could be announced as soon as Monday, one of the people said.
The acquisition would extend Palo Alto Networks’ acquisitions of small cybersecurity startups and add another offering to its suite of enterprise security software geared to companies with remote or hybrid workforces. Talon’s core offering is a secure web browser based on Google’s Chromium software whose features aim to prevent employees from clicking malicious links.
THE TAKEAWAY
• Palo Alto Networks has been buying small security startups
• Deal could value Talon at between $600 million and $700 million
• Talon makes software geared toward remote workers
Palo Alto Networks, which has a $76 billion market capitalization, last week said it would acquire Israeli data security startup Dig. It paid about $400 million, according to TechCrunch.
Talon declined to comment. A spokesperson for Palo Alto Networks did not immediately respond to a request for comment.
Interest in Talon also shows companies are willing to pay a premium for cybersecurity startups. Talon was generating less than $1 million annually in revenue in 2022, The Information reported at the time. Its more recent revenue couldn’t be learned. Palo Alto Networks may be equipped to quickly monetize Talon’s product by selling it alongside its popular firewall and cloud security technology.
It also indicates that deals for Israeli startups are still getting done after the outbreak of the Oct. 7 terrorist attacks by Palestinian group Hamas. The Israeli military has since drafted hundreds of thousands of reserve soldiers, including thousands of tech startup workers, some of whom are now fighting in the Hamas-controlled Gaza Strip. In September, The Israeli outlet Calcalist reported that Palo Alto Networks was negotiating a deal to acquire Talon for $600 million.
Talon has raised $126 million from backers including Lightspeed Venture Partners and Team8. The Tel Aviv-based startup was founded in 2021 by CEO Ofer Ben-Noon and CTO Ohad Bobrov. Its software also tracks what employees are downloading as well as screenshots they have taken.
Palo Alto Networks has in recent years entered newer markets such as cloud security, where it competes with rising startups like Wiz, as well as incumbents like Netskope and Zscaler. To win in that field, Palo Alto Networks has recently relied on offering discounts on its software bundles, The Information previously reported.