ServiceNow (NOW.US) invests $7.75 billion to acquire startup Armis

The Zhitong Finance App learned that the US enterprise software company ServiceNow (NOW.US) announced on Tuesday that it will acquire cybersecurity startup Armis in an all-cash transaction, with a transaction valuation of about 7.75 billion US dollars. ServiceNow said that the merger and acquisition will significantly enhance its cybersecurity capabilities in the age of artificial intelligence and expand its potential market space for security and risk solutions to more than three times the original.

ServiceNow said in a statement that the deal is expected to be completed in the second half of next year, with a combination of cash and debt. After the news was announced, the company's stock price fell more than 2% during early trading.

Amit Zavery, president and head of product and operations at ServiceNow, said that the combination of the two parties will create an “industry-defined” strategic cybersecurity protection system to provide real-time, end-to-end, and forward-looking proactive protection for various technology assets.

It was reported earlier this month that Armis is exploring a potential deal with ServiceNow, valued at around $7 billion. Armis is headquartered in California and mainly helps companies protect networked devices from cyber risks. The company announced in November this year that it had completed financing of US$435 million, with a post-investment valuation of US$6.1 billion.

At the time, Armis co-founder Yevgeny Dibrov said in an interview that the company originally planned to seek listing in 2026 or 2027, but its core goal was to increase annual recurring revenue (ARR) to more than $1 billion. He pointed out that demand for cyber exposure management and security platforms continues to rise, and the demand for related tools is “unique and huge.”

As the IPO market gradually picks up amid fluctuations, more and more companies are choosing to delay listing or exit through mergers and acquisitions. Large technology companies, including Stripe and Databricks, have received ample financial support in the private equity market in recent years.

In the context of the accelerated spread of AI, enterprises continue to increase their investment in cybersecurity to deal with increasingly complex cyber threats. This year has also been an active year for mergers and acquisitions in the cybersecurity sector, including Google (GOOG.US, GOOGL.US)'s acquisition of cloud security startup Wiz for 32 billion dollars, and Palo Alto Networks (PANW.US)'s acquisition of CyberArk for 25 billion dollars.

ServiceNow also revealed that Armis's current annual recurring revenue has exceeded US$340 million, a year-on-year increase of 50%, higher than the US$300 million level disclosed in August this year, indicating that its business scale and growth momentum continue to increase.