Google’s parent company, Alphabet, is going to execute its largest acquisition to date by acquiring Wiz, a young cloud security company, for a massive amount of $32 billion in cash. The massive merger also includes another $1 billion in retention bonuses, which will be distributed among Wiz’s 1,700 employees, to motivate and retain them with the company after the acquisition is complete. Following this massive merger, Wiz will remain an independent entity and will continue to provide its services to all cloud providers and not exclusively Google Cloud. Moreover, Wiz is also going to expand its workforce through more employees and is also planning to make other future acquisitions.
The deal-making process is a complex process involving obtaining several regulatory approvals from the concerned regulatory bodies and is likely to successfully conclude by 2026. Google had previously attempted to acquire the startup company Wiz at a whopping price of $23 billion but had ultimately fallen through due to significant antitrust concerns and the necessity of keeping the startup independent. Moreover, the political climate in America might actually prove to be even more favorable for making expensive tech deals, and that could potentially make this particular deal a lot more viable in the current situation.
Wiz, now generating a whopping $700 million of annual recurring revenue, is projected to nearly triple that figure to a whopping $1 billion in the near future. Such huge growth potential makes Wiz an incredibly valuable asset for Google’s expanding cloud business and robust security solutions. The acquisition of Wiz not only reflects Google’s strategic intent to enhance its competitive edge against robust challengers such as AWS and Microsoft Azure, but also perfectly aligns with the company’s continued emphasis on focusing on artificial intelligence innovations and enhancing cybersecurity capabilities.
In general, the deal is being met with an upbeat reception since it is beneficial both for Wiz investors and for the move by Google to strengthen and enhance its offerings in the cloud services. Further updates and details are also expected to be brought out following the end of an upcoming investor call that is imminent.
