TEL AVIV (Reuters) - Blackstone Group (BX.N) is in advanced talks to pay $400 million for 40 percent of privately held Israeli firm NSO Group, a maker of spyware for mobile devices, Israel's Calcalist business newspaper reported on Sunday.
Another investor – ClearSky – is expected to join Blackstone in the deal as a secondary buyer for 10 percent, Calcalist said.
An NSO spokesman said he could not confirm the report. Blackstone, a New York-based buyout firm, was not immediately available to comment. ClearSky did not immediately respond to a Reuters' request for comment.
NSO has come under international scrutiny in recent months amid allegations the Mexican government has used NSO's Pegasus mobile spyware to target private citizens.
Cyber researchers with Citizen Lab at the University of Toronto's Munk School of Global Affairs said last month the Mexican government tried to install Pegasus software on devices belonging to opposition lawmakers as well as private citizens including human rights lawyers and journalists. [nL1N1JH01Y]
Mexican President Enrique Pena Nieto has asked the attorney general's office to investigate the allegations about the use of Pegasus. He said he wanted to get to the bottom of the accusations, which he said were false.
U.N. human rights experts on Wednesday called on the Mexican government to conduct an impartial investigation into allegations of illegal spying. [nL5N1KA4VF]
NSO was founded in 2009 by Omri Lavie and Shalev Hulio. Private equity firm Francisco Partners paid $120 million to acquire a majority stake in NSO in 2014.
Calcalist said Francisco Partners could achieve a partial exit via the deal four times bigger than its initial investment. A month and a half ago, NSO distributed a $230 million dividend that will not be included in the deal's value, the newspaper reported.
Under the deal, Francisco Partners will own 40 percent of NSO, Blackstone and ClearSky together will hold 40 percent, the founders will have 6 percent each and the company's 500 employees will hold the remaining 8 percent.
(Additional reporting by Jim Finkle in Toronto)