---
title: "Arbs earn about 3% a year to wait out Proofpoint's $6.3 billion Varonis buyout"
description: "Proofpoint agreed to pay $49.75 a share for Varonis, the stock sits 93 cents under the deal price, plaintiff firms are circling a $63.80 peak, and the private rival in the same category is asking for $20 billion."
publisher: "The Inference"
section: "Deals"
published: 2026-10-30T16:16:28.923Z
modified: 2026-10-30T16:16:28.923Z
canonical: https://theinference.org/article/arbs-earn-about-3-a-year-to-wait-out-proofpoint-s-6-3-billion-varonis-buyout
language: en
keywords: "M&A, Cybersecurity, Arbitrage, Varonis, Thoma Bravo"
---

# Arbs earn about 3% a year to wait out Proofpoint's $6.3 billion Varonis buyout

> Proofpoint agreed to pay $49.75 a share for Varonis, the stock sits 93 cents under the deal price, plaintiff firms are circling a $63.80 peak, and the private rival in the same category is asking for $20 billion.

Proofpoint, the Thoma Bravo-owned security vendor, [agreed on October 15, 2026, to buy Varonis](https://theinference.org/article/thoma-bravo-pays-6-3-billion-for-varonis-at-49-75-just-4-8-over-the-last-close), the data-security software maker, for $49.75 a share in cash, a transaction worth about $6.3 billion, with the [Varonis](https://theinference.org/markets/companies/varonis) board approving unanimously [1]. Close is expected in the first half of 2027, subject to shareholder and regulatory approvals [1].

Thoma Bravo committed the equity and secured debt financing, and Ontario Teachers' Pension Plan agreed to invest into Proofpoint alongside [1]. Proofpoint is paying 8.4 times trailing revenue and 53 times trailing free cash flow for a company whose second-quarter revenue grew 18.3% to $180.02 million, with adjusted earnings of $0.04 a share beating the $0.01 consensus [1][2].

*Chart: **Growth re-accelerated to 18.3% in the quarter Proofpoint priced** Columns of Varonis quarterly revenue from Q1 2024 to Q2 2026*

*Revenue in millions of US dollars from Varonis's SEC filings, retrieved October 30, 2026. Growth re-accelerated in 2026 after a slowdown in the second half of 2025, the trend Proofpoint is buying at 8.4 times trailing revenue. [9]*

The premium math exposes the leak. $49.75 is 52% above the $32.71 close on June 22, the last day before the first sale rumors, but only 17% above the $42.35 close on September 1, the day before "additional media reports speculating about a potential sale" [1]. The stock added just 2.5% in after-hours trading when the agreement surfaced on October 15 [4]. The deal was priced before most of the public could act on it.

## The spread

Varonis closed at $48.89 on October 22, [the day it told noteholders about the merger](https://www.bullished.co/varonis-tells-2029-noteholders-the-49-75-a-share-proofpoint-sale-would-trigger-make-whole-e5941c37/) [3], and traded at $48.82 by October 29, 93 cents under the cash price [4]. That is a 1.9% gross spread; with closing roughly eight months out at the back edge of the guided window, the annualized return works out to about 2.9% [4]. Short interest sits at 5.51% [4]. Waiting through a shareholder vote and regulatory clearances for under 3% a year is pocket change, not payment [4].

*Chart: **The deal price sits $14.05 below this year's high, 93 cents above the tape** Bars comparing Varonis Systems' 52-week high of $63.80, the $49.75 Proofpoint deal price and the $48.82 market price on October 29, 2026*

*US dollars per Varonis share. 52-week high as cited by Wohl & Fruchter's investigation; deal price from the merger announcement of October 15, 2026; market price is the October 29 close. [1][3][4]*

## Noteholders get paid only on closing

[A October 22 notice to holders of the 1.00% convertible senior notes due 2029](https://www.sec.gov/Archives/edgar/data/1361113/000121390026111750/ea0309445-defa14a_varonis.htm) says the merger will constitute a Fundamental Change, a Make-Whole Fundamental Change and a Corporate Event "as of the Effective Time," and that if the merger "is not consummated for any reason, then none" of the three events will have occurred [5]. In plain terms, the make-whole protection pays only on closing. The note spread and the equity spread carry the same condition: no close, no pay.

## The two camps on price

Halper Sadeh LLC, an investor rights law firm, [is investigating whether the board obtained the best possible price](https://www.morningstar.com/news/business-wire/20261015701996/vrns-stock-alert-halper-sadeh-llc-is-investigating-whether-varonis-systems-inc-is-obtaining-a-fair-price-for-its-shareholders), ran a fair process and disclosed everything shareholders need [6]. Wohl & Fruchter is questioning the price against the stock's 52-week high of $63.80 [3].

The board's answer is on the record: an independent committee ran "extensive outreach to a range of potential strategic and financial buyers," and CEO Yaki Faitelson called the price "immediate, significant, and certain value well in excess of the risk-adjusted value" of the standalone plan [1].

## The category reprices while the deal waits

[Cyera](https://theinference.org/markets/companies/cyera), the private company selling data security for the AI age in the same category as Varonis, [added a $400 million Goldman Sachs extension to its Series G](https://www.businesswire.com/news/home/20260922497312/en/Cyera-Announces-%24400-Million-Investment-from-Goldman-Sachs-to-Build-the-Trust-Layer-for-the-Agentic-Enterprise) on September 22, on top of a $600 million round led by Evolution Equity Partners in June [7][8]. Six outlets reported this week that Cyera is in talks at a $20 billion valuation, a figure no company filing confirms [8].

Proofpoint is locking the category's public benchmark at 8.4 times revenue while its closest private rival asks for 67% more than the $12 billion mark [Goldman](https://theinference.org/markets/companies/goldman-sachs) underwrote a month earlier [1][7][8]. Every dollar of credibility the Cyera ask gains is a dollar of ammunition for the firms arguing $49.75 is light [1][7][8]. The Inference followed the money into Cyera when Goldman wired its check in September; this week's reported repricing is what is new.

*Chart: **Cyera raised $1.4 billion in three 2026 checks before this week's $20 billion ask** Columns showing Cyera's 2026 raises: $400 million Series F in January, $600 million Series G in June and a $400 million Goldman Sachs extension in September, with a note on the reported $20 billion talks*

*Millions of US dollars, announced by the company. Series F January 2026, Series G June 2026 led by Evolution Equity Partners, and the Goldman Sachs Growth Equity extension of September 2026. The $20 billion figure is reported talks only, unconfirmed by any filing. [7][8]*

## What decides it from here

Varonis reports third-quarter results after the close on November 3, with no earnings call because of the pending deal [1]. The proxy for the special meeting has not been filed yet [5]. Three readings set the spread from here: the Q3 print, the litigation disclosures in the proxy, and whether Cyera's talks close anywhere near $20 billion [8]. If the category re-rates, the $49.75 print ages badly and the litigants gain leverage [8]. If the Cyera talks die, the deal closes as signed and arbs keep their 3% [8].

## Takeaway

Varonis trades 93 cents under Proofpoint's $49.75 cash price, about a 2.9% annualized return over an eight-month wait, while plaintiff firms lean on a $63.80 peak and Cyera's reported $20 billion ask; the make-whole pays only on closing.

## Sources

1. [Proofpoint Newsroom, Proofpoint to Acquire Varonis in a $6.3 Billion Transaction, 15 October 2026](https://www.proofpoint.com/us/newsroom/press-releases/proofpoint-acquire-varonis-creating-global-leader-data-and-ai-security)
2. [ad-hoc-news.de, Proofpoint agrees to acquire Varonis and offers USD 49.75 for Varonis Systems stock, collected 30 October 2026](https://www.ad-hoc-news.de/boerse/news/corporate-news/proofpoint-agrees-to-acquire-varonis-and-offers-usd-49-75-for-varonis-systems-stock/70428292)
3. [Bullished, Varonis Tells 2029 Noteholders The $49.75-A-Share Proofpoint Sale Would Trigger Make-Whole Terms, 27 October 2026](https://www.bullished.co/varonis-tells-2029-noteholders-the-49-75-a-share-proofpoint-sale-would-trigger-make-whole-e5941c37/)
4. [Seeking Alpha, Varonis Systems gains after Proofpoint agrees to buy for $49.75/share in cash, 15 October 2026 (quote data as of 30 October 2026)](https://seekingalpha.com/news/4653629-varonis-systems-gains-after-proofpoint-agrees-to-buy-for-4975share-in-cash)
5. [Varonis Systems DEFA14A, Notice Regarding Corporate Event to holders of 1.00% Convertible Senior Notes due 2029, SEC EDGAR, 22 October 2026](https://www.sec.gov/Archives/edgar/data/1361113/000121390026111750/ea0309445-defa14a_varonis.htm)
6. [Halper Sadeh LLC via Business Wire on Morningstar, VRNS Stock Alert: Investigating Whether Varonis Systems Is Obtaining a Fair Price, 15 October 2026](https://www.morningstar.com/news/business-wire/20261015701996/vrns-stock-alert-halper-sadeh-llc-is-investigating-whether-varonis-systems-inc-is-obtaining-a-fair-price-for-its-shareholders)
7. [Business Wire, Cyera Announces $400 Million Investment from Goldman Sachs to Build the Trust Layer for the Agentic Enterprise, 22 September 2026](https://www.businesswire.com/news/home/20260922497312/en/Cyera-Announces-%24400-Million-Investment-from-Goldman-Sachs-to-Build-the-Trust-Layer-for-the-Agentic-Enterprise)
8. [Shattered.io, Cyera Reportedly Eyes $20B Valuation, Up 67%, 30 October 2026](https://shattered.io/cyera-20-billion-valuation-talks-series-g-12-billion-2026/)
9. [Varonis Systems, quarterly figures from its SEC filings, retrieved 30 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001361113)


---

Arbs earn about 3% a year to wait out Proofpoint's $6.3 billion Varonis buyout — The Inference. Canonical: https://theinference.org/article/arbs-earn-about-3-a-year-to-wait-out-proofpoint-s-6-3-billion-varonis-buyout