Palo Alto Networks to Acquire Expanse for $800M

Palo Alto Networks has actively been acquiring companies over the past few years, and today announced another addition: an agreement to purchase Expanse for a total of $800 million, consisting of both cash and equity incentives. Specifically, the agreement includes $670 million in cash and stock, alongside an additional $130 million in equity awards designated for Expanse personnel.

Expanse delivers a service designed to assist organizations in identifying and safeguarding their attack surface – the areas where they are most susceptible to cyberattacks. It accomplishes this by providing security teams with a perspective mirroring that of a potential attacker attempting to gain unauthorized access.

The intention is to integrate Expanse’s functionalities into Palo Alto’s Cortex Suite, a collection of AI-powered tools created to automatically identify and neutralize attacks. Expanse is anticipated to supply Palo Alto with valuable data that will enhance the performance of its AI models.

“The integration of Expanse’s attack surface management capabilities into Cortex will enable us to provide the first solution that merges an external view of an organization’s vulnerabilities with an internal perspective, allowing for proactive mitigation of all security risks,” stated Nikesh Arora, chairman and CEO of Palo Alto Networks.

Expanse views the acquisition as an opportunity to expedite its development plans by leveraging the resources of a larger organization like Palo Alto, a common rationale expressed by companies undergoing acquisition. “Collaborating with Palo Alto Networks will allow us to realize our key business objectives significantly faster than initially projected. Discussions with Palo Alto Networks leadership revealed a shared belief that a strategic combination of technology and expertise can resolve numerous cybersecurity issues that have historically proven difficult to overcome,” explained the startup’s founders in a blog post regarding the transaction.

As part of the agreement, which is projected to finalize during Palo Alto’s second fiscal quarter pending regulatory approval, two co-founders, Dr. Tim Junio and Dr. Matt Kraning, will be joining the Palo Alto Networks team.

Founded in 2012, Expanse has secured $136 million in funding, as reported by Crunchbase. Its latest funding round, a $70 million Series C, occurred last year and was spearheaded by TPG.

This acquisition represents Palo Alto’s third purchase in 2020 and its tenth since 2018. Palo Alto Networks’ stock experienced a 2.15% increase in early trading today.