Control of NSO Group is set to leave Israeli hands. A group of American investors led by Hollywood producer Robert Simonds has agreed to acquire the controversial spyware developer in a deal valued at several tens of millions of dollars. The transaction is expected to be signed in the coming days, though its completion will require approval from Israel’s Defense Export Control Agency (DECA) at the Ministry of Defense.
Since March 2023, NSO’s shares have been held by a Luxembourg-based holding company wholly owned by founder Omri Lavie. The company’s lender syndicate, which had extended roughly $500 million in loans to finance a share buyback from the private equity fund Francisco Partners, transferred ownership to Lavie following the restructuring.
Shortly after the transfer, Simonds, a Hollywood producer and founder of STX Entertainment, known for films starring Adam Sandler and Reese Witherspoon, joined the holding company’s board of directors. In June 2023, Simonds attempted to acquire NSO but resigned from the board two months later after the effort failed.
Now, about two and a half years later, Simonds has succeeded in formulating a deal to acquire the company. While the final terms remain unclear, the agreement is expected to include the divestment of NSO’s roughly $500 million debt. Following completion, Lavie’s involvement in the company will end, marking the complete departure of NSO’s founding team. The other co-founder, Shalev Hulio, left about two and a half years ago.
According to sources familiar with the company’s operations, during his two years of control, Lavie managed to lead a turnaround that moved NSO from years of losses, following its inclusion on the U.S. Department of Commerce blacklist in 2021, to near balance and even slight profitability. This recovery reportedly helped make the company more attractive to investors.
Completion of the acquisition will also require approval from the U.S. Securities and Exchange Commission (SEC). However, regulatory review could be complicated by Simonds’ past business ties to China. He founded STX Entertainment in 2012 with investments from Hony Capital, a Chinese private equity fund controlled by Legend Holdings, the parent company of Lenovo. In 2016, additional investors joined, including Tencent and Hong Kong-based PCCW. Three years later, TPG and Hony Capital led another $700 million funding round in STX.
Source link
