Palo Alto
Networks

Palo Alto Networks is a global leader in cybersecurity, providing platforms to help secure enterprise users, networks, clouds, endpoints, and identities by delivering comphrensive cybersecurity backed by artifiical intelligence and automation.

Transaction Terms

Transaction

~$25B Acquisition of CyberArk

Assumed Security

$1.25B 0% Convertible Senior Notes due 2030

Derivative Overlay

Capped call (up 75%)

Consideration

$45 cash + 2.2005 Palo Alto Networks shares per CyberArk share

Announced

July 2025

Closed

February 2026

Situation Overview

Assuming complex
instruments in M&A

On July 30, 2025, Palo Alto Networks announced a definitive merger agreement to purchase CyberArk Software Ltd. for $45 in cash and 2.2005 PANW shares per CYBR share.

In June 2025, CyberArk had issued $1.25B in 0% convertible senior notes due 2030, hedged with a freestanding (non-tax integrated) capped call with an "up-75%" cap. As part of the acquisition, these instruments migrated to Palo Alto Networks' consolidated balance sheet — creating complex structuring, documentation and bank negotiation challenges.

HudsonWest’s Role

Structuring, documenting
and advocating for Palo Alto Networks

Structuring the Assumption

HudsonWest worked in close collaboration with Palo Alto Networks' senior management and its legal, tax and accounting teams to help structure Palo Alto Networks' assumption of the notes and capped calls. This included helping to design and implement complex basket security mechanics.

Valuation Support

HudsonWest provided valuation support to the Company for both the assumed convertible notes and the capped call instruments, ensuring Palo Alto Networks had independent, expert analysis throughout the acquisition process.

Tax Integration of Capped Calls

A critical element of the transaction was supporting the tax integration of the capped calls — a technically demanding process given the freestanding (non-tax integrated) nature of the original CyberArk hedge structure.

Documentation Coordination

HudsonWest assisted in coordinating the documentation process alongside Palo Alto Networks' counsel, including a supplemental indenture and amended capped call documentation reflecting the new obligor.

Conversion Management

HudsonWest supported the company in connection with make-whole conversions covering $152.5MM of notes.

Palo AltoNetworks

Assuming complexinstruments in M&A

Structuring, documentingand advocating for Palo Alto Networks

Let's start aconversation.

Palo Alto
Networks

Assuming complex
instruments in M&A

Structuring, documenting
and advocating for Palo Alto Networks

Let's start a
conversation.