Dynatrace to acquire Arize for $915 million

• Dynatrace (NYSE:DT) agreed to acquire AI observability company Arize in a cash and stock transaction valued at $915 million.
• The deal includes approximately $815 million in cash and replacement equity awards for Arize employees joining Dynatrace.
• Dynatrace said the acquisition will expand its AI observability capabilities across AI application development, deployment, and production monitoring.

Dynatrace (NYSE:DT) agreed to acquire Arize for $915 million in a cash and stock transaction, combining AI observability and application monitoring capabilities across the artificial intelligence development lifecycle.

The acquisition is expected to strengthen Dynatrace’s position in AI observability, a market the company said is projected to exceed $10 billion by 2030, while adding Arize’s AI evaluation and monitoring technology.

Under the agreement, Dynatrace will acquire Arize for approximately $815 million in cash plus replacement equity awards for Arize employees joining Dynatrace, with funding expected from cash on hand and/or its existing credit facility.

Dynatrace expects the transaction to be approximately 200 basis points accretive to annual recurring revenue growth and 175 basis points dilutive to non-GAAP operating margin in fiscal 2027.

Arize provides AI observability tools designed to help companies evaluate AI models, monitor AI agents, identify output quality issues, and analyze AI applications in production environments.

The transaction is expected to close later in the quarter or early in Dynatrace’s fiscal third quarter, subject to regulatory review and other customary closing conditions, with Arize founders Jason Lopatecki and Aparna Dhinakaran joining Dynatrace after completion.