ServiceNow will acquire cybersecurity startup Armis in a cash deal valued at $7.75 billion, the company said Tuesday.
The enterprise software company said the deal will bolster its cybersecurity capabilities in the age of artificial intelligence and more than triple its market opportunity for security and risk solutions.
“This is about making a strategic move to accelerate growth, and we see the opportunity for our customers,” CEO Bill McDermott told CNBC’s “Squawk on the Street” on Tuesday. “In this AI world, especially with the agents, you’re going to need to protect these enterprises [because] every intrusion is a multi-million dollar problem.”
ServiceNow said the deal is expected to close in the second half of next year, financed by a combination of cash and debt.
The company has been on an acquisition spree in 2025 as it sought to accelerate growth, McDermott said.
ServiceNow announced a deal for AI agent platform Moveworks for $2.85 billion in March, and at the beginning of December, said it would acquire identity security platform Veza.
“ServiceNow will have the only AI control tower that drives workflow, action and business outcomes across all of these environments,” McDermott added.
Bloomberg first reported earlier this month that Armis was exploring a possible $7 billion deal with ServiceNow.
In November, the California-based company, which helps businesses protect internet-connected devices from cyber risks, said it had raised $435 million at a $6.1 billion valuation.
At the time, co-founder Yevgeny Dibrov told CNBC that Armis was looking to go public in 2026 or 2027, but his main objective was to surpass $1 billion in annual recurring revenues.
“The need for what Armis is doing and what we are building, in this cyber exposure management and security platform, is just increasing,” he said, adding that there’s “very unique and huge” demand for its tools.
Many companies have opted to stay private for longer or get acquired as a turbulent initial public offering market has begun to rebound. Large companies such as Stripe and Databricks have found an influx of capital in private markets.
In the age of AI, companies are spending more on cybersecurity to protect against increasingly sophisticated threats.
This year has also been significant for major cybersecurity deals as companies look to enhance their threat protection capabilities. That includes Google’s $32 billion acquisition of cloud security startup Wiz and Palo Alto Networks’ $25 billion deal for CyberArk.
ServiceNow said Armis has topped $340 million in annual recurring revenue with 50% year-over-year growth, up from $300 million disclosed in August.
