CyberArk executives announced that it will buy cybersecurity company Venafi from private equity firm Thoma Bravo in a deal believed to be worth around $1.54 billion. The information security services firm based in Israel plans to purchase Venafi for around $540 million in stock and $1 billion in cash. It is projected that the deal will close in the second half of 2024. CyberArk’s stock increased 2.3% during premarket trading.

The acquisition takes place months after Cisco Systems paid $28 billion to acquire cybersecurity startup Splunk in September, as businesses seek to protect their enterprise security offerings in response to growing risks to online safety. The boards of both companies have given their approval to the acquisition.

“By combining forces with Venafi, we are expanding our abilities to secure machine identities in a cloud-first, GenAI, post-quantum world,” said CyberArk CEO Matt Cohen.

CyberArk anticipates that Venafi will bring in about $150 million in recurring income annually. In the first quarter, the company reported a 37% increase in overall revenue to $221.6 million and a nearly 70% increase in subscription revenue. Because of its strong position in cloud security, the company will be able to extend CyberArk’s total addressable market by about $10 billion to $60 billion as a result of the agreement, the company officials said, adding that the acquisition will instantly improve CyberArk’s profits.

In December 2020, Thoma Bravo invested in Venafi with the intention of growing the company, estimating its worth at $1.15 billion at the time.