Cybersecurity has been a dealmaking bright spot amid the broader software gloom, fueled by bets that AI adoption will boost demand for security products. But it’s been hard for private equity firms to get in on the sizzling sector.

Corporate buyers have been snapping up cybersecurity companies, competition that makes it harder for private equity firms to buy at prices that leave room for attractive returns when they eventually sell. Rising interest rates further limit what the firms can pay in debt-heavy buyouts.

That makes Thoma Bravo–backed cybersecurity company Proofpoint’s agreement last week to acquire data security company Varonis Systems in a $6.3 billion deal a notable example of how private equity can still find an opening in a hot market. And the tech-focused private equity giant is likely to do at least one more deal around this size in the coming year.

The proposed acquisition values Varonis at around six times forward annual recurring revenue, according to a person close to the deal.…