ServiceNow (NOW) is reportedly close to pulling off its biggest acquisition yet, with advanced talks underway to buy cybersecurity firm Armis for up to $7 billion, according to people familiar with the negotiations.
The deal could be announced in the coming days, though as with any late-stage negotiation, things could still fall apart. There's also the possibility that another bidder could swoop in before an agreement is finalized, according to Bloomberg.
If the transaction closes, it would represent ServiceNow's largest acquisition in company history. Both ServiceNow and Armis declined to comment outside business hours.
Why Armis Matters
Founded in 2016, Armis has carved out a meaningful niche in cybersecurity as a U.S.-Israeli company focused on real-time protection of connected devices. The startup's client roster is impressive: more than 40% of the Fortune 100 relies on its platform.
The company's momentum has been building steadily. Armis raised $435 million just last November in a pre-IPO funding round that valued the business at $6.1 billion. Goldman Sachs Alternatives' growth equity fund led that round, with participation from CapitalG and new investor Evolution Equity Partners.
That funding came on the heels of strong operational performance. Armis has surpassed $300 million in annual recurring revenue while maintaining its grip on a huge chunk of Fortune 100 customers. The company has been positioning itself for a potential IPO while working toward a longer-term target of $1 billion in ARR.
Wall Street Weighs In
The acquisition talks come at an interesting time for ServiceNow. Separately, Keybanc analyst Jackson Ader recently downgraded the stock from Sector Weight to Underweight, setting a $775 price target.
Meanwhile, ServiceNow Keeps Expanding
The potential Armis deal isn't ServiceNow's only major move lately. The company recently announced plans to invest 110 million Canadian dollars to accelerate AI adoption across Canadian government agencies.
That investment includes building Canada-hosted infrastructure, launching a Canada Centre of Excellence, enhancing data residency and security measures, and hiring about 100 Canada-based employees. Separately, shareholders approved a 5-for-1 stock split.
NOW Price Action: ServiceNow shares were down 8.11% at $794.92 at the time of publication on Monday.
