Google buys Wiz for $32B

A source previously indicated that the total value of the transaction could reach $33 billion, including an additional $1 billion in retention bonuses to ensure employees stay post-acquisition. With around 1,700 employees, this translates to an average of over $588,000 per person, although actual amounts will vary depending on individual salaries.

‍

Wiz will continue to operate as an independent platform, compatible with all cloud providers, not just Google Cloud. Plans include further investments for expansion and potential acquisitions, a strategy the company has already been pursuing over the past year.

‍

Currently, Wiz generates approximately $700 million in annual recurring revenue. The deal has been compared to the acquisition of LinkedIn in terms of the acquired company maintaining its autonomy within a larger organization. However, it is worth noting that LinkedIn has gradually integrated more services from its parent company over time.

‍

The agreement is subject to regulatory and other necessary approvals before closing, which is expected in 2026. Previously, Google’s most expensive acquisition was the $12.5 billion purchase of a major mobile technology company in 2011.

‍

Discussions around this acquisition have been ongoing for nearly a year, with negotiations recently resurfacing at a $30 billion valuation.

‍

At present, Google Cloud’s CEO is in Europe, while Wiz’s CEO is in Israel. It is understood that the deal was primarily driven by Google Cloud leadership, positioning Wiz as a key element in the company’s push into cloud security.

‍

Google Cloud has emphasized that its shared goal with Wiz is to make cybersecurity more accessible and easier to use for organizations of all sizes and industries. The company believes that helping businesses prevent cyberattacks—especially in complex enterprise software environments—will reduce costs, disruptions, and risks associated with cybersecurity threats.

‍

In 2023, Google had previously offered $23 billion to acquire Wiz, but negotiations fell through due to concerns about regulatory approvals, the level of independence Wiz would maintain within Google Cloud, and the overall valuation. At the time, Wiz was valued at $12 billion following a $1 billion funding round earlier that year.

‍

Since then, the regulatory landscape has shifted, and some analysts believe that current conditions may be more favorable for large technology acquisitions that may have previously faced obstacles.

‍

Google’s interest in acquiring Wiz is driven by two main factors: strengthening its position in the enterprise cloud sector, where it still lags behind AWS and Microsoft Azure, and expanding its security offerings. While the company has existing security products, it has lacked a solution of Wiz’s scale and growth potential.

‍

Wiz is particularly appealing because it brings an already well-established and rapidly growing business to Google Cloud. The company is on track to double last year’s annual recurring revenue and surpass $1 billion.

‍

Additionally, this acquisition may serve to balance Google’s investments in other areas, such as artificial intelligence.

‍

With the increasing role of AI and the widespread adoption of cloud services, cybersecurity has become even more critical in mitigating emerging threats and ensuring national security.

‍

After the initial deal collapsed in 2024, Wiz conducted a secondary sale at a $16 billion valuation, meaning this acquisition effectively doubles that valuation. This marks a significant return for Wiz’s investors, which include several major venture capital firms.

‍

Prior to the deal, rumors suggested that Wiz was in the process of raising new funding at an even higher valuation.

‍

In 2023, Wiz’s CEO publicly stated that while an acquisition was not ruled out for the future, it was the company that ultimately walked away from the initial deal. He described the decision as “the toughest ever” but also maintained that it was “the right choice.”

‍

Powered by Markelitics.com

‍

‍