Wiz, an Israeli cybersecurity startup, and Alphabet, the parent company of Google, have called off negotiations on a rumored $23 billion merger that would have given Wiz the U.S.
According to a Wiz document obtained, the Israeli cybersecurity startup Wiz has terminated talks with Google parent Alphabet (GOOGL.O) on a reported $23 billion deal that would have made it the U.S. tech giant’s largest-ever acquisition. Assaf Rappaport, the CEO of Wiz, stated that the company would now concentrate on its earlier scheduled initial public offering and hopes to reach $1 billion in recurring revenue annually. Rappaport made reference to an acquisition offer in the memo and wrote, “Saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice.”
Talks over a deal have not been formally acknowledged by Wiz or Alphabet. Alphabet and Google were not mentioned in the Wiz memo. According to sources earlier this month that cited a person familiar with the subject, Alphabet was in advanced talks to acquire Wiz for about $23 billion. This amount is about twice as much as what Wiz disclosed in May, when it raised $1 billion in a private investment round at a $12 billion valuation.
Wiz offers artificial intelligence-powered cloud-based cybersecurity solutions that assist businesses in locating and eliminating serious threats on cloud platforms. Google, which has been investing in its cloud infrastructure and concentrating on gaining clients for the cloud business that brought in more than $33 billion in revenue last year, will suffer from Wiz’s decision to walk out of the arrangement. The fallout is Alphabet’s second recent setback in the M&A arena, following news of its decision to back out of a deal to acquire HubSpot (HUBS.N), an online marketing software startup.
Wiz would have been Alphabet’s second significant cybersecurity acquisition after the company paid $5.4 billion to acquire Mandiant in 2022.
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