Israeli-founded Varonis agrees $6.3bn megadeal with Proofpoint

Israeli-founded cybersecurity company Varonis has agreed a $6.3 billion cash sale to US rival Proofpoint, marking a major moment for Israel’s cybersecurity sector.

The deal, announced this week, brings together two established security businesses as companies confront the increasing risks of giving artificial intelligence greater access to sensitive information. Proofpoint is owned by technology investment firm Thoma Bravo.

Varonis was founded in 2005 by Israeli entrepreneurs Yaki Faitelson and Ohad Korkus. Now headquartered in Miami, it maintains a major research and development centre in Herzliya. Faitelson remains chief executive and chairman.

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Yaki Faitelson said: “Our mission is to secure AI and the data that powers it. By joining forces with Proofpoint, we can achieve this mission faster than ever.”

The founders built the business around a problem that has become increasingly pressing: organisations generate vast amounts of information but often lack a clear understanding of who can access it.

Together, they developed the technology underpinning Varonis’ platform, helping businesses map and control access to their data. Before establishing the company, Faitelson held leadership positions at NetVision and Network Appliance, now known as NetApp.

Today, Varonis helps organisations locate sensitive information, identify excessive access permissions and detect suspicious activity across cloud services, databases and other systems. Customers include Nasdaq, fashion brand Ralph Lauren, golf equipment company Callaway and US mortgage finance group Fannie Mae.

Proofpoint’s business includes defending employees against threats arriving through email and collaboration tools.

Commenting on the proposed merger on the company’s blog, Faitelson explained why the spread of autonomous AI tools is making data protection more urgent.

“Agents can reach sensitive data faster than any employee ever could. Attackers are using AI to move faster too. That’s why our mission is to secure AI and the data that powers it. Proofpoint shares that mission.

“Together with Proofpoint, we’ll become one of the leading cybersecurity companies in the world.

The proposed combination aims to connect protection against incoming attacks with a deeper understanding of the information those attacks target, including how employees and AI systems use it.

Proofpoint chief executive Sumit Dhawan said: “By connecting communications, identities, permissions, data, and AI, we are creating an intelligence advantage that helps customers see risk more clearly, respond faster.”

Under the agreement, Varonis shareholders will receive $49.75 per share. That represents a 52 per cent premium to its closing price on 22 June, before initial takeover speculation emerged.

The transaction has been unanimously approved by Varonis’ board and is expected to complete in the first half of 2027, subject to shareholder and regulatory approval. Varonis would then become privately held and its shares would stop trading on Nasdaq.