US investment firm Integrity Partners is in negotiations to acquire Israeli cyberattack firm NSO Group, two people familiar with the talks told the "Financial Times." Other reports including from "Reuters" say that Integrity Partners would inject $300 million into NSO. Sources say that the spyware company is probably worth between $1 billion and $1.5 billion. Integrity Partners is managed by former US soldiers who would use their contacts to try and get NSO taken off the US Department of Commerce blacklist, the "Financial Times" reported.
NSO was blacklisted by the US Department of Commerce last November for allegedly using its flagship Pegasus spyware for "transnational repression" and acting against US national interests. NSO was already in hot water following the investigation last summer by Amnesty and Forbidden Stories, which was published in the "Washington Post" and "The Guardian" and other newspapers, which claimed that Pegasus was used by governments to breach the mobile phones of human rights activists, journalists and political opponents, as well as foreign governments. NSO also faces a major lawsuit from Apple in the US for hacking its phones.
Pegasus is only sold to foreign governments after NSO receives permission from Israel's Ministry of Defense and on condition that the spyware is used only to combat crime and terror. Controversially, it was revealed earlier this month that Pegasus is used by Israel Police investigations to track Israeli suspects.
A source close to NSO told the "Financial Times" that there was interest in acquiring the company from other suitors but the talks with Integrity Partners were the most advanced.
There has been a global outcry over the ability of Pegasus spyware to breach a phone, without the user needing to press on a link, has dragged down NSO's valuation. In February 2019, US private equity fund Francisco Partners sold NSO to European fund Novalpina Capital and its Israeli co-founders Shalev Hulio and Omri Lavie, together with members of the company’s senior executive team, at an estimated company value of $1 billion.
The interest by Integrity Partners in buying NSO was first reported by "Haaretz" earlier this week.
Published by Globes, Israel business news - en.globes.co.il - on January 27, 2022.
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