Alphabet, Google's parent company, is on the verge of acquiring cybersecurity firm Wiz for an estimated $23 billion, making it the largest acquisition in the company's history. An insider, who shared details under the condition of anonymity, revealed the news on Sunday, as reported by Reuters. The deal, primarily financed through cash, could be finalized shortly.
A Monumental Acquisition Amid Regulatory Scrutiny
Wiz, an Israeli-founded startup now based in New York, has rapidly risen as a leader in the cloud-based cybersecurity sector. The firm offers real-time threat detection and AI-powered response solutions. This acquisition represents a significant move by Alphabet amid increased regulatory scrutiny during President Joe Biden's administration. U.S. regulators have been increasingly resistant to large-scale acquisitions by tech giants in recent years.
In 2023, Wiz reported approximately $350 million in revenue and boasts a client base that includes 40% of Fortune 100 companies. The company recently secured $1 billion in a private funding round, valuing it at $12 billion. Wiz collaborates with major cloud providers like Microsoft and Amazon and serves prominent companies such as Morgan Stanley and DocuSign. With a workforce of 900 employees spread across the U.S., Europe, Asia, and Israel, Wiz plans to hire an additional 400 employees globally in 2024.
Surge in Tech Mergers and Acquisitions
Alphabet's decision to pursue Wiz comes on the heels of its recent choice not to acquire online marketing software firm HubSpot. The technology sector has seen a significant surge in merger and acquisition activities this year. In January, design software company Synopsys agreed to acquire Ansys for approximately $35 billion, and Hewlett Packard Enterprise struck a $14 billion deal to purchase networking gear maker Juniper Networks.
According to Dealogic, technology mergers and acquisitions have surged, accounting for the largest share in the first half of the year, with a 42% year-over-year increase, reaching $327.2 billion. The Wall Street Journal initially reported on Alphabet's discussions with Wiz earlier on Sunday.
If the deal proceeds, it will underscore Alphabet's strategic focus on enhancing its cybersecurity capabilities amidst a rapidly evolving digital threat landscape. The acquisition of Wiz would position Alphabet to better protect its vast digital infrastructure and offer enhanced security solutions to its extensive client base.
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