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Shares of Zscaler Inc (Nasdaq: ZS) are up 4.0% on Monday following a report that the cloud security company is in talks to buy Avalor.

How much could Zscaler spend on Avalor?

The $36 billion company based out of San Jose, California is willing to spend between $250 million to $350 million on the potential acquisition, as per a Calcalist report over the weekend.

Zscaler is yet to comment on the news. But Raanan Raz – the chief executive of Avalor said in a statement to Calcalist today:

 

We are an excellent company and receive acquisition offers all the time. We are continuing full speed ahead.

The report arrives more than a month after Zscaler Inc reported its financial results for the first quarter that handily topped Street estimates.

Zscaler has a history of buying Israeli startups

Note that it’s not the first time that Zscaler Inc has shown interest in buying an Israeli startup.

In April of 2021, the Nasdaq-listed firm spent some $40 million to acquire Trustdome to expand its footprint in cloud security posture management (CSPM). It also bought Canonic Security – a platform that minimises risk of SAAS supply chain attacks last year for $50 million.

⚠️ThreatLabz has identified a new #ransomware group called #Slug that is performing data extortion attacks only (no file encryption).

Current leak site URL: https://t.co/K0Rk4vOA7S

Ransom note: https://t.co/86j4J7FVbz

Negotiations are performed through the @session_app pic.twitter.com/tX6Qb6ND8T

— Zscaler ThreatLabz (@Threatlabz) January 17, 2024

In 2023, Avalor also announced $30 million in funding including a TCV-led $25 million Series A in which Salesforce Ventures participated as well.

Wall Street currently has a consensus “overweight” rating on shares of Zscaler Inc that have close to tripled versus its 52-week low in last May.  

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