ServiceNow is on the verge of finalising the biggest deal in its history. The IT service management software giant is in advanced talks to acquire cyber security startup Armis. The stakes are high, as the valuation of the deal could reach $7 billion, which would effectively derail plans for the Israeli-American company’s IPO, tentatively planned for next year.
For the market, this would be a surprising but strategically sound move. Armis, founded in 2016, has grown into a leader in protecting so-called unmanaged devices (IoT/OT). As recently as November, the company closed a funding round, reaching a valuation of $6.1 billion and boasting service to more than 40 per cent of Fortune 100 companies. A possible transaction with ServiceNow, valued at nearly $1 billion above the last round, would be an attractive exit for investors, removing the risk associated with uncertain capital markets.
From ServiceNow’s perspective, the acquisition signals a more aggressive entry into the SecOps segment. Bill McDermott’s platform has for years sought to move beyond traditional ITSM, positioning itself as a ‘platform of platforms’. The inclusion of Armis technology, which provides real-time visibility into every device connected to the corporate network, would allow ServiceNow to offer a unique combination of asset inventory and incident response automation. This is crucial in the face of increasing regulatory pressure that is forcing boards to make cyber resilience a business priority.
Despite the advanced stage of negotiations, Bloomberg notes that talks could still fail or a rival offer could emerge. However, if the parties reach an agreement, a deal announcement is expected in the coming days. This would be a clear sign that, despite the cooling economy, demand for advanced digital security services is driving consolidation at the top of the technology industry.
