Verint Systems Invests In Military-Grade Cybersecurity Firm NSO Group

U.S. software company Verint Systems, Inc. is looking to buy NSO Group, an Israeli company that sells military-grade technology, for around $1 billion.

The Wall Street Journal reported that Verint has offered to pay NSO’s controlling shareholder, San Francisco-based private-equity firm Francisco Partners, with its own stock and assumed debt. If the deal is completed, Francisco Partners would become the largest Verint shareholder. Verint — based in Melville, NY  trades on the Nasdaq Stock Market with a market value of around $2.8 billion.

Spokeswomen for all three companies declined to comment on the report.

NSO makes cybersurveillance products, including Pegasus spyware, and sells them primarily to government security agencies. In 2016, researchers at Citizen Lab  a group that investigates surveillance technology  revealed that they discovered NSO software in a link sent to the phone of a human-rights activist in the United Arab Emirates, and that the software was being used by foreign governments to spy on citizens. At the time, an NSO spokesman said that NSO doesn’t operate its systems and requires customers to use them lawfully “for the prevention and investigation of crimes.”

Francisco Partners acquired NSO for $110 million in 2014. The firm raised more than $14 billion to buy stakes in dozens of technology companies since its founding in 1999.

Verint’s clients include more than 10,000 organizations in 180 countries. Its products include “cyber-intelligence solutions,” which the company says help “organizations neutralize and prevent terror, crime and cyber threats.”

The company also specializes in customer engagement. In 2016, Verint acquired OpinionLab, a provider of continuous voice of the customer (VOC) listening solutions that drive smarter, real-time customer engagement in the digital space.

Ben Smith, senior vice president and general manager of customer experience solutions at Verint, said at the time of the deal, “At the highest level, Verint’s mission is to help our customers optimize customer engagement using actionable intelligence. We provide companies with technology to optimize the customer-care components of their businesses. We help them listen to the customer through surveys, feedback mechanisms, recorded calls and speech analytics.”

Verint recently reported $1.1 billion of revenue for the year to January 31.