Report: Check Point Software Technologies In Talks To Acquire CyberArk

Check Point Software Technologies is in the initial stages of talks to acquire CyberArk Software, a report said -- a move could make a lot of sense for both security vendors, an analyst and a partner say.

The report, published by Israeli publication The Marker, said talks to acquire the privileged account management vendor were in "preliminary stages" and would likely take a couple of months before any deal is signed.

Check Point and CyberArk declined to comment on the report, both saying that they don’t comment on rumors.

[Related: 6 Blockbuster Security Acquisitions You Could See In 2016]

The report didn't specify a price that the two Israeli companies were discussing for the deal, though with an estimated $1.2 billion market capitalization, the deal would likely be the largest in Check Point's history. The security vendor has already made multiple smaller acquisitions in recent months, picking up Lacoon Mobile Security last April for about $80 million, as well as Hyperwise last February.

Some analyst reports in recent months have also pointed to FireEye as a possible acquisition target for the security vendor.

The deal could work for both vendors, said Jane Wright, senior analyst at Hampton, N.H.-based Technology Business Research. For Check Point, Wright said, the acquisition would fill a gap in the security vendor's portfolio in privileged identity.

"Check Point has a really robust portfolio in general, and identity, especially privileged identity, is an area where it was a little weaker," Wright said in an interview with CRN. "This would make a great move" to fill that gap, Wright said.

Sean Curry, chief technology officer and principal consultant at Cavalry Solutions, a Greenwood Village, Colo.-based Check Point and CyberArk partner, said he thinks adding privileged account management to the lineup would be a differentiator for Check Point in the market over other network security vendors. For CyberArk, Curry said, the move would be a "win," widely extending the security vendor's reach in the market.

"It's absolutely something that we'd like to see," Curry said.

Wright said highly specialized CyberArk is also in a position where it likely needs to be acquired, as more customers look to consolidate their offers under a fewer number of vendors. She said TBR estimates that customers will look to reduce the number of brands they work with by 10 percent over the next few years. For more niche vendors like CyberArk, Wright said, that poses a challenge going forward, one that could be solved by acquisition.

Given that CyberArk has good technology and is profitable, Wright said, it is unlikely that Check Point is the only vendor evaluating it for an acquisition. She said CyberArk could also make a good acquisition for a company like the new Hewlett Packard Enterprise.

"This is really good timing [for CyberArk]. They're growing well, they're profitable, they do what they do very well, but that's the only thing they do," Wright said. "We are seeing customers increasingly going to look for vendors that can meet more of their needs," she said.

PUBLISHED JAN. 13, 2015