Palo Alto Networks is paying $410 million in cash to buy container security vendor Twistlock, and it's also buying serverless security startup PureSec.
Both deals were announced late Wednesday after several Israeli newspapers reported that Palo Alto was buying Herzliya, Israel-based Twistlock. Globes, an Israeli business publication, reported that Palo Alto was paying between $60 million and $70 million for PureSec, which is based in Tel Aviv.
Palo Alto Networks said that Twistlock and PureSec would be used to extend its Prisma cloud security portfolio, which is used by 9,000 customers worldwide. While Palo Alto competes against other security vendors, such as Check Point and Fortinet, in the telco space, it has been branching out into the cloud sector.
Twistlock adds a container security platform into Palo Alto's security offerings, as well as more than 290 customers, including more than a quarter of the Fortune 100 list. With cloud-native, Kubernetes and container deployments heating up for developers, enterprises and service providers, the Twistlock deal is timely.
Founded four years ago, Twistlock combines vulnerability management, compliance, and runtime defense for cloud-native applications and workloads. Twistlock co-founders Ben Bernstein and Dima Stopel will join Palo Alto Networks.
"Our vision for a cloud-native security platform is a natural fit with Palo Alto Networks cloud strategy," said CEO Bernstein, in a statement. "We have liked-minded teams, and we're looking forward to accelerating our ability to serve customers and partners on their cloud-native journey together."
Prior to the deal with Palo Alto, Twistlock raised close to $63 million, according to Crunchbase data, including the most recent funding round of $33 million last summer.
PureSec has raised $10 million, according to Crunchbase. PureSec helps customers build and maintain end-to-end serverless applications that cover vulnerability management, access permissions and runtime threats. PureSec co-founders Shaked Zin, Ory Segal and Avi Shulman will join Palo Alto Networks.
Both deals are subject to closing conditions and regulatory approvals.
Palo Alto's stock was down 6% Thursday morning after it announced the deals and its fourth quarter guidance during Wednesday's third-quarter earnings results. The company forecast adjusted fourth-quarter profit in the range of $1.41 per share to $1.42 per share, below analysts’ estimates of $1.54, according to IBES data from Refinitiv.
That guidance included an about $2.5 million, or 2 cents per share, hit from tariffs, according to Palo Alto.