Israeli Spyware Firm Paragon Acquired by US Investment Group: A New Chapter in Cybersecurity

The global cybersecurity landscape is witnessing a significant shift with the acquisition of Israeli spyware firm Paragon by US investment group AE Industrial Partners. The deal, valued at up to $900 million, signals a growing interest in Israeli cybersecurity technology from international investors and highlights the strategic importance of the sector.

Paragon, founded by former IDF 8200 intelligence unit commander Brig. Gen. (res.) Ehud Schneorson and former Prime Minister Ehud Barak, has developed Trojan horse software called Graphite. This software can extract data from encrypted messaging apps like WhatsApp, Facebook Messenger, Signal, and Telegram. Unlike other Israeli cyberattack companies such as NSO and Candiru, Paragon was established with US investment and operates only in 34 democratic countries, coordinating with security authorities and local legal systems to minimize privacy invasions.

AE Industrial Partners, a US private investment firm focusing on aerospace, defense, and government services, will merge Paragon into its portfolio cyber company REDLattice. This acquisition allows Paragon to expand its market footprint in countries like the UK, Ireland, Australia, New Zealand, and Canada, as well as the US. Additionally, the deal includes a clause enabling Paragon to export its cyberattack technology to the US.



The acquisition of Paragon by AE Industrial Partners echoes similar cyber deals conducted in Israel in recent years. US private equity fund Francisco Partners previously controlled Paragon, with Eran Gorev, a partner at Francisco Partners and former NSO CEO, investing in the company at its inception. However, Gorev will not benefit from the exit as he sold his shares years ago.

The strategic implications of this acquisition for other Israeli cybersecurity firms and their potential international partnerships are significant. The deal highlights the attractiveness of Israeli cybersecurity firms to global investors, given the country's reputation for technological innovation and expertise in the field. This acquisition follows a trend of US private equity firms investing in Israeli cybersecurity companies, such as Francisco Partners' acquisition of NSO Group in 2014. The move by AE Industrial Partners may encourage other international investors to explore potential partnerships and acquisitions with Israeli cybersecurity firms, further strengthening the global presence of these companies and fostering innovation in the cybersecurity industry.



In conclusion, the acquisition of Israeli spyware firm Paragon by US investment group AE Industrial Partners signals a growing interest in Israeli cybersecurity technology from international investors. This strategic move not only expands AE Industrial Partners' portfolio but also opens new opportunities for other Israeli cybersecurity firms to form international partnerships and strengthen their global presence. As the global cybersecurity landscape continues to evolve, the acquisition of Paragon by AE Industrial Partners serves as a testament to the importance of Israeli cybersecurity technology in the international market.