Palo Alto Networks, the American cybersecurity giant, released its quarterly reports on Wednesday, along with key insights from its recent earnings call with investors. Over the past month, Palo Alto has unveiled its strategic purchases of Dig Security and Talon Cyber Security, both of which are Israeli cybersecurity firms established in 2021.
According to the reports, the company’s founders of both startups are expected to record significant profits from their young companies. The major beneficiaries in the Talon deal are not only the company’s investors but also its employees and co-founders, Ofer Ben Noon and Ohad Bobrov. Palo Alto stated that it paid $435 million in cash for Talon, excluding options. Based on the cash and options’ estimated value, stockholders will receive approximately $550 million, with an additional $70 million allocated for the company’s employees in options and stocks for retention purposes. According to the agreement, Talon’s founders will receive a sum of over $200 million in stocks and cash.
The main reason the two founders registered such a significant exit is the fact that their company is very young, and they haven’t gone through many funding rounds that would have diluted the value of their holdings. The substantial amount allocated to the company’s employees also reflects Palo Alto’s strong desire to retain its workforce during this time to create continuity. Additionally, it reflects the founders’ and investors’ efforts to ensure that the employees also benefit from the exit.
In the case of Talon’s founders, this exit holds particular significance. Ofer Ben Nun sold Argus in 2017 for around $450 million, and Ohad Bobrov was the founder of Lacoon Security, which was sold to Check Point in 2015 for approximately $100 million. Talon, established in 2021, currently employs 130 people, 85 of them in Israel and the rest in the United States. Since its inception, Talon has raised $126 million, and its early investors are expected to see substantial returns on their investment.
The situation for Dig Security mirrors that of Talon but involves slightly smaller figures. Palo Alto Networks announced its acquisition of the company for $232 million in cash, supplemented by an additional sum in options, bringing the overall transaction value to approximately $320 million. Similarly, the founders and employees of Dig Security will register a substantial exit.
Established in 2021 by CEO Dan Benjamin, CTO Gadi Akoka, and R&D manager Ido Ezeran, Dig’s founders are set to receive substantial sums in the tens of millions of dollars, having raised $45 million until its recent sale.
