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The founders of NSO raised $ 500 million to acquire control of the company

Founders of NSO CEO-Shalev Hulio and Omri Lavi

The founders of the Israeli company NSO raised $500 million to finance the company’s acquisition of controlling shareholder from Francisco Partners, according to Moody’s. The funds were raised from Credit Suisse and Jefferies.

NSO was founded in 2010 by Shalev Julio, Omri Lavi, and Niv Carmi and operates mostly in secret under the media and public radar. Three weeks after its establishment, Carmi retired and sold his shares to Julio and Lavi. At the time of its establishment, about 30% of its shares were held by a group of investors led by Eddie Shalev, which injected $1.8 million into the company. In 2014, the US investment fund, Francisco Partners, acquired some 70% of Tmura for $130 million, which constituted a handsome exit for the group of investors.

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Moody’s credit rating agency, reveals that the NSO’s cash flow will be $95 million in 2019 and will rise by 2020 to $120 million. Moody’s gave the company a B-2 rating for raising credit, which is considered the highest for Cyber.

Moody’s also provided the Company with a credit rating of B-2 for revolving credit of $30 million. At the same time, S & P issued a similar report in which it gave a credit rating of B to the company.

The management and investment fund said in a statement “The acquisition of NSO has been successfully completed by the company’s management and the $1 billion Nouvelina investment fund, of which $500 million has been raised from the Credit Suisse and Jeffries banks.” The transaction is fully funded, based on Moody’s and S & Which gave a high rating to the company’s business situation. ”

The company’s annual revenue is about $ 300 million. Moody’s estimates that the company will post a minimum EBITDA of at least $80 million a year.

Israeli Company NSO Defends it’s Cyber-Spy Tool, Pegasus

The purpose of the credit is to finance the Company’s acquisition of the management and of the European investment fund Nouvellefa, as well as refinancing the existing debt of the Company and paying for the transaction expenses.

The S&P report indicates that the company is not planning to distribute dividends in the near term and that the company’s cash flow is expected to exceed $ 95 million in 2019 and to grow significantly in 2020 to $ 110-120 million.

According to Moody’s, the credit rating reflects strong operating income and operating profit with high demand, positive cash flow, and high liquidity, a high number of customers, a very small variety of products, but an improvement in geographical dispersion and high success in renewing contracts.

Moody’s rating reflects the company’s good performance in recent years, characterized by an increase in EBITDA margins and high margins. The company’s rise in revenues in recent years has led it to expand its cash flow.

The rating company points to a number of weaknesses in the Israeli company. The Company’s renewable revenues base is low compared to competitors in the industry and depends on the Company’s ability to convert and renew maintenance contracts, all of which are signed for a period of 12 months. This is despite the fact that the company has recorded contract renewals amounting to 90%.

The company operates in the worldwide technology tracking market, which according to the company’s managers estimates is approximately $12 billion. With the exception of the US market, most of the global market has not yet been discovered.

Moody’s expects cyber surveillance to continue to be significant for governments and security organizations despite relying on public budgets.

The company considers itself the only option currently offered by the market for a comprehensive solution to the field of sophisticated spot tracking. Moody’s believes that there are high entry barriers to competition in Israeli society, which help it maintain a competitive edge. A significant drawback is the shortage of skilled personnel who will know how to operate the company’s technology and systems.




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