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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): October 15, 2026
VARONIS SYSTEMS, INC.
(Exact
name of registrant as specified in its charter)
| Delaware |
|
001-36324 |
|
57-1222280 |
(State
or Other Jurisdiction
of Incorporation) |
|
(Commission
File Number) |
|
(I.R.S.
Employer
Identification No.) |
801 Brickell Avenue
Miami,
Florida 33131
(Address
of Principal Executive Offices) (Zip Code)
(877)
292-8767
(Registrant's
telephone number, including area code)
N/A
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
| ☐ | Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☒ | Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
| Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
| Common Stock, par value $0.001 per share |
|
VRNS |
|
The
NASDAQ Stock Market LLC |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01. Entry into a Material Definitive Agreement.
On October 15, 2026 (the “Signing Date”),
Varonis Systems, Inc., a Delaware corporation (the “Company”), entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with Proofpoint, Inc., a Delaware corporation (“Parent”), and Vail Merger Sub, Inc., a Delaware
corporation and a wholly owned subsidiary of Parent (“Merger Sub”). Pursuant to and subject to the terms and conditions
set forth in the Merger Agreement, at the Closing, Merger Sub will merge with and into the Company, with the Company continuing as the
surviving corporation and becoming a wholly owned subsidiary of Parent (the “Merger”). Parent and Merger Sub are affiliates
of funds advised by Thoma Bravo, L.P. (“Thoma Bravo”). Capitalized terms used but not defined herein have the meanings
ascribed thereto in the Merger Agreement.
The Board of Directors of the Company (the “Company
Board”) has unanimously (i) determined that the Merger Agreement, the Merger and the other transactions contemplated thereby
are advisable, fair to and in the best interests of the Company and its stockholders, (ii) authorized and approved the execution and delivery
of the Merger Agreement and performance by the Company of its covenants and obligations contained therein and the consummation by the
Company of the transactions contemplated thereby, (iii) approved and declared advisable the Merger Agreement and the other transactions
contemplated thereby, including the Merger, (iv) directed that the adoption of the Merger Agreement be submitted to a vote at a meeting
of the Company’s stockholders, and (v) resolved to recommend that the Company’s stockholders approve the adoption of the Merger
Agreement, including the Merger, in each case, on the terms and subject to the conditions of the Merger Agreement and in accordance with
the General Corporation Law of the State of Delaware.
If the Merger is consummated, the shares of common
stock of the Company, par value $0.001 per share (the “Shares”), will be delisted from the Nasdaq Stock Market and
deregistered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
The
Merger is expected to close in the first half of 2027.
Effect
on Capital Stock
At the effective time of the Merger (the “Effective
Time”), each Share issued and outstanding as of immediately prior to the Effective Time (other than any Dissenting Shares, Restricted
Shares or Shares (i) held in the treasury of the Company, (ii) owned, directly or indirectly, by Parent or Merger Sub or (iii) owned,
directly or indirectly, by any Subsidiary of the Company) will be converted automatically into the right to receive $49.75 in cash, without
interest (the “Merger Consideration”).
Treatment
of Company Equity Awards
| · | Each outstanding Company Option, whether vested or unvested,
will be canceled in exchange for a cash payment equal to the product of (i) the excess, if any, of the Merger Consideration over the
per-Share exercise price of such Company Option and (ii) the number of Shares underlying such Company Option. |
| · | Each Company RSU that vests at the Effective Time in accordance
with the terms of the applicable award agreement (the “Single-Trigger RSUs”) (including Company RSUs held by non-employee
directors of the Company) will vest in full and be canceled in exchange for a cash payment equal to the product of the Merger Consideration
and the number of Shares subject to such Single-Trigger RSU. Each outstanding Company RSU that is not a Single-Trigger RSU will, at the
Effective Time, be canceled and converted into the right to receive a cash amount equal to the product of the Merger Consideration and
the number of Shares subject to such Company RSU (each, a “Converted RSU”), which will vest on the same vesting schedule
that applied to the corresponding Company RSU and, upon vesting, will be paid in cash or in equity of the surviving corporation or its
parent, and will otherwise be subject to the same terms and conditions that applied to the corresponding Company RSU. |
| · | Each Company PSU that vests at the Effective Time in accordance
with the terms of the applicable award agreement (the “Single-Trigger PSUs”) will vest and be canceled in exchange
for a cash payment equal to the product of the Merger Consideration and the number of Shares subject to such Single-Trigger PSU, determined
based on the applicable level of performance. Each outstanding Company PSU will, at the Effective Time, be canceled and converted into
the right to receive a cash payment equal to the product of the Merger Consideration and the number of Shares to which the holder of
such Company PSU would be entitled upon settlement thereof, determined assuming (x) performance in respect of the 2024 and 2025 performance
years is achieved based on actual performance, (y) performance in respect of the 2026 performance year is achieved at target or maximum
performance, as applicable and (z) performance in respect of the 2027 and 2028 performance years is achieved based on actual performance
(each, a “Converted PSU”), which will vest on the same time-based vesting schedule that applied to the corresponding
Company PSU and, upon vesting, will be paid in cash or in equity of the surviving corporation or its parent, and will otherwise be subject
to the same terms and conditions (other than terms related to performance) that applied to the corresponding Company PSU. |
Conditions
to the Merger
Consummation
of the Merger is subject to certain customary conditions set forth in the Merger Agreement, including, but not limited to (i) approval
by the holders of at least a majority in voting power of the outstanding Shares entitled to vote thereon, (ii) the absence of any Governmental
Entity issuing any order or other legal restraint that makes consummation of the Merger illegal or otherwise prohibited, (iii) (x) the
expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and (y) the clearance or approval under certain specified foreign regulatory laws and (iv) the absence of any Material Adverse Effect
since the date of the Merger Agreement. The obligation of each party to the Merger Agreement to consummate the Merger is also conditioned
upon certain unilateral closing conditions, including the other party’s representations and warranties being true and correct (subject
to certain customary materiality exceptions) and the other party having performed in all material respects its obligations under the
Merger Agreement. The obligations of Parent and Merger Sub to consummate the Merger are not subject to any financing condition.
Termination
and Fees
The Merger Agreement contains certain termination
rights for the Company, on the one hand, and Parent, on the other hand, including that, subject to certain limitations, the Company or
Parent may terminate the Merger Agreement (i) if the Merger is not consummated by 11:59 p.m. New York Time, on July 15, 2027 (the “Termination
Date”), subject to a three month extension to obtain required regulatory approvals, (ii) if any order prohibiting the Merger
has become final and non-appealable, (iii) if the Company Stockholder Approval is not obtained at the Company Stockholders Meeting or
(iv) subject to certain conditions and, in each case, prior to the receipt of the Company Stockholder Approval, (x) by Parent if the
Company Board adversely changes its recommendation in favor of the Merger or (y) by the Company if the Company wishes to terminate the
Merger Agreement to enter into a definitive agreement providing for a Superior Proposal. The Company and Parent may also terminate the
Merger Agreement by mutual written consent.
The
Company is required to pay Parent a termination fee of $211,700,000 in cash on termination of the Merger Agreement under specified circumstances,
including, among others, termination by Parent in the event that the Company Board adversely changes its recommendation in favor of the
Merger or termination by the Company to enter into an agreement providing for a Superior Proposal. The Merger Agreement also provides
that a reverse termination fee of $423,300,000 will be payable by Parent to the Company under specified circumstances, including, among
others, if (i) Parent fails to consummate the Merger following satisfaction or waiver of certain closing conditions and the Company’s
irrevocable confirmation that it is ready, willing and able to consummate the closing or (ii) the Company terminates the Merger Agreement
due to Parent’s breach of its obligations under the Merger Agreement, which breach gives rise to a failure of certain conditions
to the Merger and Parent fails to cure such breach.
The
Merger Agreement also provides that, in certain circumstances, the parties are entitled to specific performance of the other party’s
obligations under the Merger Agreement, including the Company’s right, subject to the satisfaction of certain conditions (including
that the Debt Financing has been or will be funded at Closing), to cause Parent to enforce the Equity Commitment Letter and to consummate
the Merger.
Financing
Commitments
Parent
has obtained equity financing and debt financing commitments for the purpose of financing the transactions contemplated by the Merger
Agreement and paying related fees and expenses.
Funds managed by Thoma Bravo (collectively, the
“Equity Commitment Parties”) have severally committed to aggregate equity contributions to Parent for the purpose of
financing the Transactions on the terms and subject to the conditions set forth in the Equity Commitment Letter.
Certain
financial institutions have severally committed to provide Parent with debt financing for the purpose of financing the Transactions on
the terms set forth in the Debt Commitment Letter.
The
obligations of the Equity Commitment Parties to provide equity financing under the Equity Commitment Letter and the lenders to provide
debt financing under the Debt Commitment Letter are each subject to a number of customary conditions. The Company is a third-party beneficiary
under certain provisions of the Equity Commitment Letter, pursuant to the terms thereof.
Representations,
Warranties and Covenants
The
Company has made customary representations, warranties and covenants in the Merger Agreement, including, among others, covenants subject
to customary exceptions (i) to conduct its business in the ordinary course of business in all material respects during the interim period
between the execution of the Merger Agreement and the consummation of the Merger, (ii) not to engage in certain specified actions during
that period, (iii) providing for customary “no-shop” restrictions under which the Company and its representatives are generally
prohibited from soliciting Acquisition Proposals from third parties or providing information to or participating in any discussions,
communications or negotiations with third parties regarding Acquisition Proposals and (iv) using commercially reasonable efforts to take
all actions necessary, proper or advisable to consummate the Transactions.
Support
Agreement
On October 15, 2026, in connection with the execution
of the Merger Agreement, Parent entered into a Support Agreement (the “Support Agreement”) with the Company and Yaki
Faitelson, Chief Executive Officer and President of the Company, in his capacity as a stockholder of the Company. Under the terms of the
Support Agreement, Mr. Faitelson has agreed, among other things, to vote all of his Shares in favor of the adoption of the Merger Agreement
and the Transactions.
As
of the date hereof, Mr. Faitelson beneficially owned an aggregate of approximately 0.67% of the outstanding Shares. The Support Agreement
will terminate upon certain circumstances, including upon the valid termination of the Merger Agreement in accordance with its terms.
The
foregoing description of the Support Agreement is not complete and is qualified in its entirety by reference to the full text of the
Support Agreement, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Effect on Convertible Senior Notes
The consummation of the Merger will constitute, among other things,
a “Make-Whole Fundamental Change” and a “Corporate Event,” each as defined in the Indenture, dated as of September
10, 2024, between the Company and U.S. Bank Trust Company, National Association, as trustee, governing the Company's outstanding 1.00%
Convertible Senior Notes due 2029.
Description
of Merger Agreement Not Complete
The Merger Agreement and the above description
of the Merger Agreement have been included to provide investors with information regarding the terms of the Merger Agreement. They are
not intended to provide any other factual information about the Company, Parent or their respective subsidiaries or affiliates. The representations,
warranties and covenants contained in the Merger Agreement were made only for purposes of the Merger Agreement and as of specific dates
therein, were solely for the benefit of the parties to the Merger Agreement and may be subject to limitations agreed upon by the parties
thereto in connection with negotiating the terms of the Merger Agreement, including being qualified by confidential disclosures made by
each party for the purposes of allocating contractual risk between the parties. In addition, certain representations and warranties may
be subject to a contractual standard of materiality different from those generally applicable to investors and may have been used for
the purpose of allocating risk between the parties rather than establishing matters as facts. Information concerning the subject matter
of the representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or
may not be fully reflected in public disclosures by the Company. The Merger Agreement should not be read alone, but should instead be
read in conjunction with the other information regarding the parties thereto that is or will be contained in, or incorporated by reference
into, the Proxy Statement, the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K and other documents that the parties will file with the Securities and Exchange Commission (the “SEC”). Investors
should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of
facts or condition of the Company, Parent or any of their respective subsidiaries, affiliates or businesses. The foregoing description
of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in
its entirety by, the full text of the Merger Agreement, a copy of which is attached hereto as Exhibit 2.1 and incorporated herein by reference.
Item
5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
On
October 15, 2026, Mr. Faitelson entered into a term sheet with Parent, pursuant to which Mr. Faitelson will provide services as a non-executive
officer for an 18-month period following the Closing.
Item
7.01. Regulation FD Disclosure.
On
October 15, 2026, the Company and Parent issued a joint press release announcing that they had entered into the Merger Agreement. A copy
of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The
information included in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished
and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of
that Section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended, or
the Exchange Act, except as otherwise expressly set forth by specific reference in such filing.
Cautionary
Statement Regarding Forward-Looking Statements
This
Current Report on Form 8-K contains not only historical information, but also forward-looking statements made pursuant to the safe-harbor
provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent the Company’s expectations
or beliefs concerning future events, including the timing of the Transactions contemplated by the Merger Agreement and other information
relating to the Transactions. Forward-looking statements include information concerning possible or assumed future results of operations
of the Company, the expected completion and timing of the Transactions and other information relating to the Transactions. Without limiting
the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” “intends,”
“forecasts,” “estimates,” “contemplate,” “future,” “goal,” “potential,”
“predict,” “project,” “projection,” “may,” “will,” “could,” “should,”
“would,” “assuming” and similar expressions are intended to identify forward-looking statements. However, the
absence of these words does not mean that the statements are not forward-looking. Where, in any forward-looking statement, the Company
expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to be reasonable
at the time such forward-looking statement is made. However, these statements are not guarantees of future performance and involve certain
risks, uncertainties and other factors beyond the Company’s control. Therefore, actual outcomes and results may differ materially
from what is expressed or forecast in the forward-looking statements. Those following important factors and uncertainties, among
others, could cause actual results to differ materially from those described in the forward-looking statements: (i) the risk that
the Transactions may not be completed in a timely manner or at all, which may adversely affect the Company’s business and the price
of the common stock of the Company, (ii) the failure to satisfy the conditions to the consummation of the Transactions, including
the adoption of the Merger Agreement by the stockholders of the Company and the receipt of regulatory approvals from various governmental
entities (including any conditions, limitations or restrictions placed on these approvals) and the risk that one or more governmental
entities may deny approval, (iii) the occurrence of any event, change or other circumstance that could give rise to the termination
of the Merger Agreement, (iv) the risk that the Merger Agreement may be terminated in circumstances that require the Company to
pay a termination fee, (v) the effect of the announcement or pendency of the Transactions on the Company’s business relationships,
operating results and business generally, including the Company’s ability to attract, integrate, develop, manage, retain and motivate
qualified employees and senior leaders as a result of such effects, (vi) risks that the Transactions disrupt current plans and operations,
(vii) risks related to diverting management’s attention from the Company’s ongoing business operations, (viii) the
outcome of any legal proceedings that may be instituted against the Company related to the Merger Agreement or the Transactions, (ix) unexpected
costs, charges or expenses resulting from the Transactions, (x) the ability to obtain the necessary financing arrangements set forth
in the commitment letters received in connection with the Transactions, (xi) the impact of adverse macroeconomic or labor market
conditions, including the impacts of inflation and effects of geopolitical instability, (xii) risks caused by delays in upturns
or downturns being reflected in the Company’s financial position and results of operations, (xiii) uncertainty as to timing
of completion of the Transactions, and (xiv) other factors described under the heading “Risk Factors” in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2025, the Company’s subsequent
Quarterly Reports on Form 10-Q, and in other reports and filings with the SEC. Forward-looking
statements speak only as of the date of this Current Report on Form 8-K or the date of any document incorporated by reference in this
document. The Company cautions you that the important factors referenced above may not contain all of the factors that are important
to you. In addition, the Company cannot assure you that the Company will realize the results or developments expected or anticipated
or, even if substantially realized, that they will result in the consequences or affect the Company or the Company’s operations
in the way the Company expects. The forward-looking statements included in this Current Report on Form 8-K are made only as
of the date hereof. Except as required by applicable law or regulation, the Company does not undertake to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
Additional
Information About the Transactions and Where to Find It
This Current Report on Form 8-K is being made in respect of the Transactions
involving the Company, Parent, and Merger Sub. The Company expects to seek and intends to file with the SEC a proxy statement and other
relevant documents in connection with a special meeting of the Company’s stockholders for purposes of obtaining stockholder approval
of the Transactions. The Company may also file other relevant documents with the SEC regarding the Transactions. This Current Report on
Form 8-K is not a substitute for the proxy statement or any other document that the Company may file with the SEC. The definitive proxy
statement (when available) will be sent or given to the stockholders of the Company and will contain important information about the Transactions
and related matters. INVESTORS AND STOCKHOLDERS OF THE COMPANY ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND ANY OTHER RELEVANT
DOCUMENTS THAT MAY BE FILED WITH THE SEC BY THE COMPANY, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE PROPOSED TRANSACTIONS.
Investors will be able to obtain a free copy of the proxy statement and other documents containing important information about the Company
and the Transactions, once such documents are filed by the Company with the SEC at the SEC’s website at www.sec.gov or from the
Company at its website at https://ir.varonis.com.
Participants
in the Solicitation
The Company, and certain of its directors and executive officers, may
be deemed to be participants in the solicitation of proxies in connection with the Transactions. Information about the Company’s
directors and executive officers is set forth in (i) the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2025, including under the headings “Item 10. Directors, Executive Officers and Corporate Governance”,
“Item 11. Executive Compensation”, “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters” and “Item 13. Certain Relationships and Related Transactions, and Director Independence”, which
was filed with the SEC on February 4, 2026, (ii) the Company’s Definitive Proxy Statement for its 2026 annual meeting of stockholders,
which was filed with the SEC on April 17, 2026, under the headings “Information Regarding the Board of Directors and Corporate
Governance”, “Director Compensation”, “Executive Officers”, “Compensation Discussion and Analysis”,
“Executive Compensation”, “Security Ownership of Certain Beneficial Owners and Management”, and “Transactions
with Related Persons”, (iii) in the supplemental information regarding the participants’ holdings of Company securities that
can be found in SEC filings on Statements of Change in Ownership on Form 4 filed with the SEC on June 2, 2026 (available here) for Dov Gottlieb; on May 22, 2026 (available here) for Guy Melamed; on May 1, 2026 (available here) for Carlos Aued; on May 1, 2026 (available here) for Kevin Comolli; on May 1, 2026 (available here) for John J. Gavin, Jr.; on May 1, 2026 (available here) for Gili Iohan; on May 1, 2026 (available here) for Avrohom J. Kess; on May 1, 2026 (available here) for Ohad Korkus; on May 1, 2026 (available here) for Thomas Mendoza; on May 1, 2026 (available here) for Rachel Prishkolnik; on May 1, 2026 (available here) for Ofer Segev; and on May 1, 2026 (available here) for Fred van den Bosch, (iv) the Company’s Current Reports on Form 8-K, which were filed on April 28, 2026,
June 2, 2026 and July 28, 2026, (v) the Company’s Quarterly Reports on Form 10-Q which were filed on April 29, 2026 and July 29,
2026, and (vi) in subsequently filed Statements of Change in Ownership on Form 4, Current Reports on Form 8-K and Quarterly
Reports on Form 10-Q. Other information regarding the participants in the solicitation and a description of their direct and
indirect interests, by security holdings or otherwise, will be set forth in the Company’s definitive proxy statement and other relevant
materials to be filed with the SEC regarding the Transactions when such materials become available. Investors should read the proxy statement
carefully when it becomes available. Copies of the documents filed with the SEC by the Company will be available free of charge through
the website maintained by the SEC at sec.gov and the Company’s website at https://ir.varonis.com.
No
Offer
No
person has commenced soliciting proxies in connection with the Transactions referenced in this Current Report on Form 8-K, and this Current
Report on Form 8-K is neither an offer to purchase nor a solicitation of an offer to sell securities.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits
| Exhibit
Number |
|
Description |
| 2.1* |
|
Agreement and Plan of Merger, dated as of October 15, 2026, by and among Varonis Systems, Inc., Proofpoint, Inc. and Vail Merger Sub, Inc. |
| 10.1* |
|
Support
Agreement, dated as of October 15, 2026, by and among the Company, Proofpoint, Inc. and Yakov Faitelson |
| 99.1 |
|
Press Release issued by Proofpoint, Inc. and Varonis Systems, Inc., dated October 15, 2026 |
| 104 |
|
Cover
Page Interactive Data File (embedded within the Inline XBRL document) |
| * | Schedules
or exhibits omitted pursuant to Item 601(a)(5) of Regulation S-K, as may be applicable. The Company agrees to furnish supplementally
a copy of any omitted schedule or exhibit to the SEC upon request; provided, however, that the Company may request confidential treatment
pursuant to Rule 24b-2 under the Exchange Act, as amended, for any schedule or exhibit so furnished. |
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
| |
VARONIS SYSTEMS, INC. |
| |
|
|
| Date: October 15, 2026 |
By: |
/s/ Guy Melamed |
| |
Name: |
Guy Melamed |
| |
Title: |
Chief Financial Officer and
Chief Operating Officer |
Exhibit
99.1
Proofpoint
to Acquire Varonis in a $6.3 Billion Transaction
Combination
creates a new cybersecurity powerhouse to deliver a complete security platform that protects against AI-accelerated threats and data
risks
MIAMI,
FL and SUNNYVALE, CA – October 15, 2026 – Varonis Systems, Inc. (Nasdaq: VRNS) (“Varonis”), the data and AI security
leader, and Proofpoint, Inc. (“Proofpoint”), a global leader in human and agent cybersecurity, today announced entrance into
a definitive agreement under which Varonis will be acquired by Proofpoint, a portfolio company of Thoma Bravo, in an all-cash transaction
valued at approximately $6.3 billion.
Under
the terms of the agreement, Varonis shareholders will receive $49.75 per share in cash. This purchase price represents a premium of
52% to Varonis’ closing stock price of $32.71 on June 22, 2026, the last full trading day prior to initial rumors about a
potential sale of the Company, and a premium of 17% over Varonis’ closing stock price of $42.35 on September 1, 2026, the last
full trading day prior to additional media reports speculating about a potential sale of Varonis. The transaction values Varonis at
approximately 53x LTM Free Cash Flow and 8.4x LTM Revenue.1
The
combined company will serve more than 16,000 enterprises and millions of organizations globally, creating one of the world’s
leading pure-play cybersecurity companies and establishing the industry’s largest data and AI cybersecurity organization.
Together, the combined company intends to deliver a unified platform that helps organizations adopt AI with confidence: finding and
protecting sensitive data, controlling what people and AI can access, and stopping data loss. Following closing, Proofpoint intends
to move quickly to integrate the companies’ capabilities, align go-to-market efforts, and accelerate delivery of the combined
platform to customers.
“Today
begins an exciting new chapter for Varonis and our customers. It’s a testament to the incredible work of the Varonis team over
two decades,” said Yaki Faitelson, Varonis CEO, Co-Founder and Chairman of the Board of Directors. “Our mission is to secure
AI and the data that powers it. By joining forces with Proofpoint, we can achieve this mission faster than ever.”
Faitelson
continued, “This announcement follows a comprehensive evaluation led by a committee of independent members of our Board of Directors,
which included extensive outreach to a range of potential strategic and financial buyers. This transaction is an excellent outcome for
the company and our shareholders, representing a realization of immediate, significant, and certain value well in excess of the risk-adjusted
value of delivering against our standalone plan.”
“As
AI becomes embedded across the enterprise, the data it can access determines both its value and its risk. AI agents are increasingly
accessing sensitive information and taking action across systems, making it critical for organizations to understand not only what data
needs protecting and who can access it, but how it is actually being used,” said Sumit Dhawan, CEO of Proofpoint. “By connecting
communications, identities, permissions, data, and AI, we are creating an intelligence advantage that helps customers see risk more clearly,
respond faster, and defend against the next generation of AI risks. This is a defining step in Proofpoint’s evolution into a cybersecurity
platform built for the future of AI.”
Transaction
Details
The
transaction, which has been unanimously approved by the Varonis Board of Directors, is expected to close in the first half of 2027,
subject to customary closing conditions, including approval by Varonis shareholders and receipt of regulatory approvals. Thoma Bravo
is providing committed equity financing, and has secured debt financing commitments, to fund the purchase. Ontario Teachers’ Pension
Plan has also agreed to make an investment into Proofpoint in connection with the transaction. Until the transaction closes,
Proofpoint and Varonis will continue to operate as separate and independent companies. Upon completion of the transaction,
Varonis’ common stock will cease trading on the Nasdaq, and Varonis will become a private company.
Third
Quarter 2026 Financial Results
Varonis
will announce its financial results for the third quarter 2026 following the close of the U.S. financial markets on November 3. The news
release will be available on the Investor Relations section of the company’s website. In light of the announced transaction, Varonis
will not conduct an earnings conference call.
Advisors
Goldman
Sachs & Co. LLC is acting as exclusive financial advisor and Paul Hastings LLP is serving as legal counsel to Varonis.
BofA
Securities, Inc., Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, UBS Securities LLC, and Mizuho Securities USA LLC are serving
as financial advisors, and Kirkland & Ellis LLP is serving as legal counsel to Proofpoint.
1
Transaction multiples are calculated as Enterprise Value / LTM Revenue and Market Capitalization / LTM Free Cash Flow as of June 30,
2026.
About
Varonis
Varonis (Nasdaq:
VRNS) secures AI and the data that powers it. The Varonis platform gives organizations automated visibility and control over their critical
data wherever it lives and helps ensure safe and trustworthy AI from code to runtime. Backed by 24x7x365 managed detection and response,
Varonis gives thousands of organizations worldwide the confidence to adopt AI, reduce data exposure, and stop AI-powered threats.
About
Proofpoint, Inc.
Proofpoint,
Inc. is a global leader in human and agent cybersecurity, securing how people, data and AI agents connect across email, cloud and collaboration
tools. Proofpoint is a trusted partner to over 80 of the Fortune 100, over 14,000 large enterprises, and millions of smaller organizations
in stopping threats, preventing data loss, and building resilience across people and AI workflows. Proofpoint’s collaboration,
data, and AI security platform helps organizations of all sizes protect their people, defend their data, and adopt AI securely and confidently.
Learn more at www.proofpoint.com.
Connect with Proofpoint on LinkedIn
Proofpoint
is a registered trademark or tradename of Proofpoint, Inc. in the U.S. and/or other countries. All other trademarks contained herein
are the property of their respective owners.
Forward-Looking
Statements
This
communication contains not only historical information, but also forward-looking statements made pursuant to the safe-harbor provisions
of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Varonis Systems, Inc.’s (the
“Company”) expectations or beliefs concerning future events, including the timing of the proposed transactions contemplated
by the Agreement and Plan of Merger, dated October 15, 2026 (the “Merger Agreement”), by and among the Company, Proofpoint,
Inc. (“Parent”) and Vail Merger Sub, Inc. (“Merger Sub”) and other information relating to the proposed transactions
contemplated by the Merger Agreement (the “Transaction”). Forward-looking statements include information concerning possible
or assumed future results of operations of the Company, the expected completion and timing of the proposed Transaction and other information
relating to the proposed Transaction. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,”
“expects,” “intends,” “forecasts,” “should,” “estimates,” “contemplate,”
“future,” “goal,” “potential,” “predict,” “project,” “projection,”
“may,” “will,” “could,” “would,” “assuming” and similar expressions are intended
to identify forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking.
Where, in any forward-looking statement, the Company expresses an expectation or belief as to future results, such expectation or belief
is expressed in good faith and believed to be reasonable at the time such forward-looking statement is made. However, these statements
are not guarantees of future performance and involve certain risks, uncertainties and other factors beyond the Company’s control.
Therefore, actual outcomes and results may differ materially from what is expressed or forecast in the forward-looking statements. The
following important factors and uncertainties, among others, could cause actual results to differ materially from those described in
the forward-looking statements: (i) the risk that the Transaction may not be completed in a timely manner or at all, which may adversely
affect the Company’s business and the price of the common stock of the Company, (ii) the failure to satisfy the conditions
to the consummation of the Transaction, including the adoption of the Merger Agreement by the stockholders of the Company and the receipt
of regulatory approvals from various governmental entities (including any conditions, limitations or restrictions placed on these approvals)
and the risk that one or more governmental entities may deny approval, (iii) the occurrence of any event, change or other circumstance
that could give rise to the termination of the Merger Agreement, (iv) the risk that the Merger Agreement may be terminated in circumstances
that require the Company to pay a termination fee; (v) the effect of the announcement or pendency of the Transaction on the Company’s
business relationships, operating results and business generally, including the Company’s ability to attract, integrate, develop,
manage, retain and motivate qualified employees and senior leaders as a result of such effects, (vi) risks that the proposed Transaction
disrupts current plans and operations, (vii) risks related to diverting management’s attention from the Company’s ongoing
business operations, (viii) the outcome of any legal proceedings that may be instituted against the Company related to the Merger
Agreement or the Transaction, (ix) unexpected costs, charges or expenses resulting from the proposed Transaction, (x) the ability
to obtain the necessary financing arrangements set forth in the commitment letters received in connection with the proposed Transaction;
(xi) the impact of adverse macroeconomic or labor market conditions, including the impacts of inflation and effects of geopolitical
instability, (xii) risks caused by delays in upturns or downturns being reflected in the Company’s financial position and
results of operations, (xiii) uncertainty as to timing of completion of the proposed Transaction, and (xiv) other factors described
under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2025, the Company’s subsequent Quarterly Reports on Form 10-Q, and in other reports
and filings with the SEC. Forward-looking statements speak only as of the date of this communication or the date of any document incorporated
by reference in this document. The Company cautions you that the important factors referenced above may not contain all of the factors
that are important to you. In addition, the Company cannot assure you that the Company will realize the results or developments expected
or anticipated or, even if substantially realized, that they will result in the consequences or affect the Company or the Company’s
operations in the way the Company expects. The forward-looking statements included in this communication are made only as of
the date hereof. Except as required by applicable law or regulation, the Company does not undertake to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
Non-GAAP
Financial Measures
This
press release includes LTM Free Cash Flow, a non-GAAP measure, which is calculated as net cash provided by operating activities less
purchases of property and equipment and capitalized internal-use software, and is presented for the 12 months ended June 30, 2026. Please
refer to “Reconciliation of GAAP Measures to non-GAAP Measures” set forth in Varonis’ earnings releases furnished to
the SEC on Form 8-K for reconciliations of free cash flow to net cash provided by operating activities for the 12 months ended December
31, 2025 and the six months ended June 30, 2026.
Additional
Information About the Acquisition and Where to Find It
This
communication is being made in respect of the proposed Transaction involving the Company, Parent, and Merger Sub. The Company expects
to seek and intends to file with the SEC a proxy statement and other relevant documents in connection with a special meeting of the Company’s
stockholders for purposes of obtaining stockholder approval of the proposed Transaction. The Company may also file other relevant documents
with the SEC regarding the proposed Transaction. This communication is not a substitute for the proxy statement or any other document
that the Company may file with the SEC. The definitive proxy statement (when available) will be sent or given to the stockholders of
the Company and will contain important information about the proposed Transaction and related matters. INVESTORS AND STOCKHOLDERS OF
THE COMPANY ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC BY THE COMPANY,
AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE PROPOSED TRANSACTION. Investors will be able to obtain a free copy of the
proxy statement and other documents containing important information about the Company and the proposed Transaction, once such documents
are filed by the Company with the SEC at the SEC’s website at www.sec.gov or from the Company at its website at https://ir.varonis.com.
Participants
in the Solicitation
The
Company, and certain of its directors and executive officers, may be deemed to be participants in the solicitation of proxies in connection
with the proposed Transaction. Information about the Company’s directors and executive officers is set forth in (i) the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2025, including under the headings “Item 10. Directors,
Executive Officers and Corporate Governance”, “Item 11. Executive Compensation”, “Item 12. Security Ownership
of Certain Beneficial Owners and Management and Related Stockholder Matters” and “Item 13. Certain Relationships and Related
Transactions, and Director Independence”, which was filed with the SEC on February 4, 2026, (ii) the Company’s Definitive
Proxy Statement for its 2026 annual meeting of stockholders, which was filed with the SEC on April 17, 2026, under the headings
“Information Regarding the Board of Directors and Corporate Governance”, “Director Compensation”, “Executive
Officers”, “Compensation Discussion and Analysis”, “Executive Compensation”, “Security Ownership
of Certain Beneficial Owners and Management”, and “Transactions with Related Persons”, (iii) in the supplemental information regarding the participants’ holdings of Company securities that
can be found in SEC filings on Statements of Change in Ownership on Form 4 filed with the SEC on June 2, 2026 (available here) for Dov Gottlieb; on May 22, 2026 (available here) for Guy Melamed; on May 1, 2026 (available here) for Carlos Aued; on May 1, 2026 (available here) for Kevin Comolli; on May 1, 2026 (available here) for John J. Gavin, Jr.; on May 1, 2026 (available here) for Gili Iohan; on May 1, 2026 (available here) for Avrohom J. Kess; on May 1, 2026 (available here) for Ohad Korkus; on May 1, 2026 (available here) for Thomas Mendoza; on May 1, 2026 (available here) for Rachel Prishkolnik; on May 1, 2026 (available here) for Ofer Segev; and on May 1, 2026 (available here) for Fred van den Bosch, (iv) the Company’s
Current Reports on Form 8-K, which were filed on April 28, 2026, June 2, 2026 and July 28, 2026, (v) the Company’s Quarterly
Reports on Form 10-Q which were filed on April 29, 2026 and July 29, 2026, and (vi) in subsequently filed Statements of Change in
Ownership on Form 4, Current Reports on Form 8-K and Quarterly Reports on Form 10-Q. Other information regarding
the participants in the solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will
be set forth in the Company’s definitive proxy statement and other relevant materials to be filed with the SEC regarding the proposed
Transaction when such materials become available. Investors should read the proxy statement carefully when it becomes available. Copies
of the documents filed with the SEC by the Company will be available free of charge through the website maintained by the SEC at sec.gov
and the Company’s website at https://ir.varonis.com.
No
Offer
No
person has commenced soliciting proxies in connection with the proposed Transaction referenced in this communication, and this communication
is neither an offer to purchase nor a solicitation of an offer to sell securities.
Contacts
For
Varonis
Media
FGS
Global
Varonis@fgsglobal.com
Investors
Tim
Perz
+1 646-640-2112
investors@varonis.com
Proxy
Solicitor
Okapi
Partners
Bruce
Goldfarb
+1
212.297.0722
bhgoldfarb@okapipartners.com
For
Proofpoint, Inc.
Media
pr@proofpoint.com
