ServiceNow to Acquire Armis for Nearly $8 Billion

• Armis raised $435 million at a $6.1 billion valuation last month and was planning an IPO for 2026-2027, now opting for acquisition instead
• Armis generates over $340 million in annual recurring revenue with 50% year-over-year growth, specializing in protecting internet-connected devices
• ServiceNow CEO McDermott emphasized the critical need for security in the AI era, noting that 'every intrusion is a multimillion-dollar problem'

ServiceNow announced it will acquire cybersecurity startup Armis for $7.75 billion in cash, with the deal expected to close in the second half of 2025. The acquisition will be financed through a combination of cash and debt.

The deal aims to strengthen ServiceNow's cybersecurity capabilities in the AI era and will more than triple its market opportunity for security and risk solutions. CEO Bill McDermott emphasized the critical need for enhanced security, noting that "every intrusion is a multimillion-dollar problem" in today's AI-driven environment.

This marks ServiceNow's third major acquisition in 2025, following the $2.85 billion purchase of an unnamed company in March and another acquisition announced in early December. McDermott stated the company has been on an "acquisition spree" to accelerate growth.

Armis, which specializes in protecting internet-connected devices from cyber risks, currently generates over $340 million in annual recurring revenue with 50% year-over-year growth. Just last month, the California-based company raised $435 million at a $6.1 billion valuation. Co-founder Yevgeny Dibrov had previously indicated plans for an IPO in 2026 or 2027, with a goal of surpassing $1 billion in annual recurring revenue.

The acquisition reflects broader market trends, including increased cybersecurity spending amid sophisticated AI threats and a wave of consolidation in the sector. Other notable 2024 cybersecurity deals include Google's attempted acquisition of Wiz and Palo Alto Networks' pursuit of CyberArk. Many companies are choosing acquisitions over IPOs as the public offering market remains volatile despite recent improvements.