Palo Alto Networks is set to acquire cybersecurity firm CyberArk.

The Wall Street Journal had reported that a proposed deal was in the works, only for the firm to confirm that a definitive agreement had been reached some 24 hours later.

Founded in 1999, CyberArk specializes in identity and privileged access management (IAM/PAM), with its end-to-end Identity Security Platform covering multiple identity types across varied environments.

The company counts more than 10,000 enterprises as clients, including Panasonic, Coca‑Cola Hellenic Bottling Company, and Ukraine’s Parkovyi Data Center.

Palo Alto Networks' acquisition of CyberArk would bolster its identity service offerings in the networking space, building on the identity-aware secure access service edge (SASE) additions to its Prisma Access platform via recent Talon Cyber Security and CloudGenix acquisitions.

This would turn the giant into an end-to-end cybersecurity platform, rivaling the likes of Cisco, Zscaler, and Fortinet. With IAM/PAM capabilities – components of increasingly networking-relevant zero-trust network access (ZTNA) and SASE architectures – Palo Alto Networks would likely rival Microsoft and Okta's identity stacks.

Under the terms of the deal, CyberArk shareholders will receive $45 in cash and 2.2005 shares of Palo Alto Networks common stock for each CyberArk share, representing around $25 billion in equity.

Nikesh Arora, chairman and CEO of Palo Alto Networks, said its purchase of CyberArk is "essential for securing the AI era."

"Our market entry strategy has always been to enter categories at their inflection point, and we believe that moment for Identity Security is now," Arora said upon confirming the acquisition. "This strategy has guided our evolution from a next-gen firewall company into a multi-platform cybersecurity leader.

"Today, the rise of AI and the explosion of machine identities have made it clear that the future of security must be built on the vision that every identity requires the right level of privilege controls, not the 'IAM fallacy.'"

The deal is expected to close during the second half of Palo Alto Networks' fiscal 2026, subject to approval from both CyberArk shareholders and regulators.

"Joining forces with Palo Alto Networks is a powerful next chapter, built on shared values and a deep commitment to solving the toughest identity challenges," said Udi Mokady, founder and executive chairman of CyberArk. "Together, we'll bring unmatched expertise across human and machine identities, privileged access, and AI-driven innovation to secure what's next."

If the deal goes ahead, it will be the second biggest acquisition of the year, passed only by Google Cloud’s ongoing $32 billion Wiz buyout, and outnumbering Palo Alto’s biggest acquisition to date, 2024’s $1.1  billion grab of IBM’s QRadar software-as-a-service (SaaS) assets.

The company has made numerous deals as of late, most recently buying AI security firm Protect AI. No terms of that deal were disclosed, though reports suggest the fee to be upward of $500 million.

Just over a week ago, Palo Alto Networks was rumored to be buying SentinelOne, an AI-powered cybersecurity provider valued between $8 billion and $10 billion. The Israeli company is linked to CyberArk with a partnership from this year that saw its identity data integrated into the SentinelOne platform.

Both parties denied the SentinelOne rumors in statements to SDxCentral, and if it were ever a reality, the deal is likely now superseded by the CyberArk acquisition.

SDxCentral has contacted Palo Alto Networks for comment.

Update: This article previously covered the WSJ's report and has been updated to reflect Palo Alto Networks' confirmation of the deal.