Verint Systems is reportedly negotiating a $1bn merger with Israeli cyber surveillance company NSO Group.
The Nasdaq-listed surveillance and business intelligence company is in talks to merge its security division with NSO Group according to the Wall Street Journals, which cited a cited a source with knowledge of the deal.
The deal, if completed, would create one of the world’s largest cyber companies. NSO is expected to remain an independent company as a new division within Verint, the source added. However, there is no certainty that a deal will go through.
Verint has offered to pay private-equity firm Francisco Partners, which is NSO’s controlling shareholder, with its own stock and assumed debt.
Francisco Partners, which paid $120m to buy a majority stake in NSO in 2014, would become the largest shareholder in Verint if the deal is completed, the source added.
Spokespeople for Verint and NSO did not immediately respond to a request for comment.
Last year, Israeli media reported that Blackstone was in talks to buy part of NSO but the US private-equity firm later pulled out of the deal.
Founded in 2010, NSO develops and sells cyber attack tools that can be used to gather intelligence from mobile phones and other devices. It counts governments and law enforcement agencies among its clients.
In the cybersecurity space, investors are increasingly backing companies based outside of the US according to recent research from RegTech Analyst.
Between 2014 and 2017, North America’s share of deals dropped by 12.9 percentage points (pp) from 80.6% to 67.7%. This share further decreased in Q1 2018 reaching 63.7%.
This was mainly offset by an increase in deal share in both Europe and the Middle East & Israel. The Middle East & Israel’s share of deals jumped from 4.4% in 2014 to 11.7% in 2017. This value reached 13.6% in Q1 2018, more than triple the original value.
The growing cybersecurity hub in Israel is the catalyst for this shift. Israel has developed a strong cybersecurity ecosystem that encourages collaboration between the government (including the military), private sector organisations and universities.
Copyright © 2018 RegTech Analyst
Copyright © 2018 RegTech Analyst
