Closely held cloud cybersecurity company Wiz Inc. is considering a potential bid for SentinelOne Inc. in what would represent a rare move by a startup to buy a large listed company.
Wiz spokesperson Tamar Harel said on Friday that the firm was studying the potential acquisition of SentinelOne, which had a market valuation of nearly $4.9 billion on Friday. Harel said Wiz has been tracking SentinelOne’s “growth journal for the past several years” and noted that there are a few companies that would complement Wiz’s offering and help expand its platform.
Wiz, which is based in New York, has approached bankers to discuss the possibility of acquiring SentinelOne but hasn’t yet hired one, according to a person familiar with the matter. One of the banks Wiz spoke to suggested it try to find a partner to help back a potential deal, the person said, asking not to be identified because the matter is private.
Harel said in a statement that Wiz “openly discussed the possibility of acquiring companies” and that the company consistently evaluates the market “as part of our mission to become the world’s leading cloud security company.”
Even if Wiz, which was valued at $10 billion earlier this year, is interested in SentinelOne, it would face some hurdles to buying the company and would have to shore up capital to have a chance. In addition, because the discussions are at such an early stage, it’s unclear whether Wiz would contemplate merging operations and taking Wiz public through a reverse initial public offering.
SentinelOne shares surged as much as 9.1% on Friday to $17.50 on the news. It was trading at $17.02 at 2:52 p.m. New York time.
SentinelOne has hired an adviser to explore options including a sale, Reuters reported earlier this week, after shares of the Mountain View, California-based company lost about 80% of their value.
A representative for SentinelOne didn’t immediately respond to a request for comment.
Talks are at an early stage, and there is no guarantee that Wiz will follow through with an offer.
While Wiz provides cloud security, SentinelOne uses artificial intelligence to prevent, detect and remediate cyber threats. Any private or public deal for SentinelOne could be worth about $6 billion to $8 billion, depending on the type of buyer, according to Bloomberg Intelligence.
Wiz has raised more than $900 million since its founding in 2020 and says that more than a third of Fortune 100 companies use its services. Growth equity firm Insight Partners is an investor in both Wiz and SentinelOne, according to its website.
In March, SentinelOne announced a strategic partnership with Wiz to deliver end-to-end cloud security.
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