Israeli offensive cyber company Paragon has been sold to US cybersecurity firm RED Lattice for more than $500m (NIS1.8bn), reported Israeli newspaper Haaretz.
Paragon, known for its advanced spyware Graphite, will continue operations in Israel, while expanding its presence in the US market.
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Founded in 2019 by former Prime Minister Ehud Barak and led by former Unit 8200 commander Ehud Schneorson, Paragon’s clients include law enforcement and intelligence agencies in Israel, Europe, and the US.
Paragon promotes its offerings on its website as “ethically based tools, teams, and insights” designed to address persistent threats.
It provides “cyber and forensic capabilities to locate and analyse digital data, cyber workforce training, and critical infrastructure analysis and threat mitigation”.
RED Lattice, owned by AE Industrial Partners, specialises in aviation, defence, and homeland security.
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By GlobalDataBarak and Schneorson, along with Paragon’s founders, including CEO Idan Norik, CTO Igor Bogdalov, and chief research officer Liad Abraham, will receive cash and shares in the acquiring company.
The sale proceeds will be disbursed in two instalments, potentially exceeding $1bn based on Paragon’s performance in the coming year.
As part of the deal, Paragon’s American unit will merge with RED Lattice.
This development follows a blocked attempt by L3Harris to acquire NSO, another Israeli spyware firm, in 2022, due to opposition from Israel’s Defence Ministry and the White House.
The sale of Paragon has been approved by authorities in both Israel and the US.
This marks a shift from past tensions between US President Joe Biden and Prime Minister Benjamin Netanyahu to an era of collaboration and acquisitions.
The transaction also highlights the emergence of “clean companies” in Israel’s offensive cyber market, focusing on ethical use of spyware.
Paragon and similar firms, such as Bindency, arose following the Pegasus scandal, distancing themselves from misuse associated with NSO’s spyware.
The Biden administration took action against the misuse of commercial spyware by blacklisting NSO and Candiru, barring them from selling to US intelligence and law enforcement agencies, thereby creating opportunities for companies such as Paragon.
