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Israeli spyware maker Paragon, which has largely kept a low profile in recent years, was acquired by American private equity giant AE Industrial Partners last week, according to Israeli news reports. reports.
Tech news site Calcalist reported on this that the investment firm is buying Paragon for $500 million, and that the deal could reach $900 million depending on how the company grows. Globes reported on this The initial payment is $450 million, of which 20% will go to Paragon’s 400 employees, 30% to the five co-founders, and the remaining 50% to the US venture capital fund Battery Ventures and the Israeli venture capital fund Red Dot.
in 2021 Forbes first revealed The existence of Paragon, which did not and still does not have a website. The magazine reported that the company was founded by a group of former Israeli intelligence officers: Ehud Shneorson, former commander of Unit 8200, a popular Israeli intelligence agency whose alumni often work in the private sector in cyber security, as well as CEO Idan Nurick, CTO Igor Bogudlov and vice president of research Liad Avraham.
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AE Industrial did not respond to TechCrunch’s request for comment on the reported deal.
Nurick and Avraham did not respond to a request for comment sent through LinkedIn. Bogudlov and Shneorson could not be reached for comment.
Battery Ventures spokeswoman Rebecca Buckman declined to comment. Red Dot did not respond to a message seeking comment.
Forbes reported in 2021 that Paragon offers services to hack phones that allow access to apps on a target’s phone, such as WhatsApp, Signal, Facebook Messenger, and Gmail. Paragon’s spyware product Graphite has been compared to Pegasus and other similar spyware products made by NSO Group.
In October Wired reported on this US Immigration and Customs Enforcement has signed a $2 million one-year contract with Paragon to provide a “fully configured proprietary solution” including licenses, hardware, warranties, maintenance and training. last month, The New Yorker Citing a Paragon source, the ICE settlement came after a due diligence process that demonstrated Paragon had controls in place to prevent customers in other countries from hacking U.S. residents.
This is an ongoing problem with the NSO Group was accused Providing tools to countries targeting American citizens, including US embassy staff. That’s partly because of these alleged hacks by the US Department of Commerce It put the NSO Group on the economic bloc list in 2021It effectively prohibits US companies from trading with the company. The US government has taken similar steps, including sanctions. against spyware maker Intellexa.
By acquiring Paragon, AE Industrial follows the example of other Western investment firms that have invested in Israeli spyware makers. In 2014, US private equity firm Francisco Partners paid $130 million to acquire 70% of NSO Group’s shares. Calcalist reported on this. That year, Francisco Partners was in contact with the Italian spyware firm Hacking Team, according to leaked emails from the company, which were stolen and then posted online by notorious hacktivist Phineas Fisher.
In 2019, two of NSO’s founders, Shalev Julio and Omri Lavie, bought the company back from Francisco Partners and regained control of it.
