"After years of eschewing big mergers, ServiceNow Inc. is on a deal spree. It has spent at least $12 billion this year on acquisitions or strategic investments. The action has some investors on edge about whether the software company is starting to lean on deals to spur growth, particularly given Chief Executive Officer Bill McDermott's history leading a series of controversial mergers during his tenure running SAP SE."
"ServiceNow on Tuesday announced its largest-ever acquisition, an agreement to buy cybersecurity startup Armis for $7.75 billion. Armis, which specializes in identifying and tracking security threats on corporate devices, makes sense as a strategic fit for ServiceNow, which sells software to help corporations manage their information technology operations. While ServiceNow has been integrating generative artificial intelligence features into its products, investors have been concerned about disruption to application software leaders from the emerging technology."
"The shares had declined 18% this year before news of the Armis deal first broke on Dec. 13, and have dropped another 12% since then. Wall Street isn't happy that the acquisition may be used to boost slowing revenue growth, wrote Matthew Hedberg, an analyst at RBC Capital Markets. The deal for Armis came a week after ServiceNow completed a $2.8 billion acquisition of Moveworks and a few months after a $750 million investment in contact center software provider Genesys."
ServiceNow has pursued numerous acquisitions and strategic investments this year, spending at least $12 billion. The company agreed to buy cybersecurity startup Armis for $7.75 billion, adding device threat identification and tracking capabilities to its IT operations software. ServiceNow completed a $2.8 billion acquisition of Moveworks and invested $750 million in Genesys, among other undisclosed deals. Shares fell 18% earlier in the year and dropped another 12% after the Armis announcement. Investors worry that management may be relying on deals to compensate for slowing revenue growth and face disruption risks from generative artificial intelligence.
Read at www.mercurynews.com
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