Okta is acquiring Auth0 for identity, single sign-on, multi-factor authentication and passwordless security technologies. The price tag: $6.5 billion in stock. Okta also said Q4 revenue grew 40 percent year over year, as part of the company's quarterly earnings statement.
Still, investors at least initially appeared concerned about the Okta-Auth0 business combination and associated price tag. Indeed, Okta's stock fell 10 percent in after-hours trading when the M&A deal and Okta's quarterly results were announced.
This is M&A deal number 155 that MSSP Alert and sister site ChannelE2E have covered so far in 2021. See all technology M&A deals for 2021 and 2020 listed here.
M&A activity in the identity and access management (IAM) has been hot. This deal surfaces only one day after private equity firm TPG Capital has acquired Thycotic from Insight Partners,, and disclosed plans to merge Thycotic with Centrify. The combined business will focus on Zero Trust Security and cloud-centric Privileged Access Management (PAM). Financial terms were not disclosed.
Okta Acquires Auth0: Deal Details
Terms of the deal include:
- Auth0 will operate as an independent business unit inside of Okta;
- both platforms will be supported, invested in, and integrated over time — "becoming more compelling together," the buyer asserts.
- Okta will acquire Auth0 for approximately $6.5 billion in Okta Class A common stock -- based on a fixed number of Okta shares and an Okta share price of $276.21.
- The boards of directors of Okta and Auth0 have each approved the transaction.
- The deal, pending regulatory approval, is expected to close during Okta’s second quarter of fiscal year 2022 -- which is the quarter ending July 31, 2021.
Okta Acquires Auth0: Executive Perspectives
In a prepared statement about the deal, Todd McKinnon (pictured at top), CEO and co-founder, Okta, said:
“Combining Auth0’s developer-centric identity solution with the Okta Identity Cloud will drive tremendous value for both current and future customers. In an increasingly digital world, identity is the unifying means by which we use technology — both at work and in our personal lives. With so much at stake for businesses today, it’s critical that we deliver trusted customer-facing identity solutions. Okta’s and Auth0’s shared vision for the identity market, rooted in customer success, will accelerate our innovation, opening up new ways for our customers to leverage identity to meet their business needs. We are thrilled to join forces with the Auth0 team, as they are ideal allies in building identity for the internet and establishing identity as a primary cloud.”
Added Eugenio Pace, CEO and co-founder, Auth0:
“Okta and Auth0 have an incredible opportunity to build the identity platform of the future. We founded Auth0 to enable product builders to innovate with a secure, easy-to-use, and extensible customer identity platform. Together, we can offer our customers workforce and customer identity solutions with exceptional speed, simplicity, security, reliability and scalability. By joining forces, we will accelerate our customers’ innovation and ability to meet the needs and demands of consumers, businesses and employees everywhere.”
Auth0: Earlier Funding
Auth0 was venture-backed ahead of the M&A deal. In fact, Auth0 in July 2020 raised $120 million in Series F funding , led by Salesforce Ventures. Existing investors Bessemer Venture Partners, Sapphire Ventures, Meritech Capital, World Innovation Lab, Trinity Ventures, Telstra Ventures and K9 Ventures also participated in that round, as well as new investor DTCP.
