Bain Capital, Advent International, and EQT AB, along with KKR, are competing to acquire Japanese cybersecurity firm Trend Micro, valued at 1.32 trillion yen ($8.54 billion), sources familiar with the matter revealed.
The private equity firms have shown interest in taking Trend Micro private recently, according to insiders who requested anonymity due to the confidential nature of the discussions. While a deal is not assured and Trend Micro may opt to stay independent, the company saw its shares surge by their daily trade limit of 1,500 yen (16.05%) to reach 10,860 yen in Tokyo on Thursday, marking its highest closing level since March 2000, following reports from Reuters about the buyout interest.
This notable price increase made Trend Micro the top gainer among the benchmark Nikkei 225 index.
If successful, the acquisition of Trend Micro would be one of the largest leveraged buyouts globally in recent times, signaling a resurgence in private equity dealings after a slowdown caused by central bank interest rate hikes in response to post-pandemic inflation concerns.
Reuters had previously reported Trend Micro attracting acquisition interest last year.
Trend Micro has not responded immediately to requests for comment, while Bain, EQT, KKR, and Advent have chosen not to provide comments.
Founded in 1988 by technology executives Steve Chang, Jenny Chang, and Eva Chen, Trend Micro initially focused on antivirus software and has since diversified its portfolio to include cloud computing, network, and endpoint security services.
In the third quarter of the previous year, Trend Micro reported a 6% increase in net sales to 68.1 billion yen, with operating income rising by 42% to 14.8 billion yen, leading to an operating margin growth to 24%.
Among its U.S. competitors are Crowdstrike, Microsoft, Palo Alto Networks, and McAfee.
The cybersecurity industry has experienced significant deal activity as corporate spending on security tools has escalated. The intensified competition among comprehensive cybersecurity platforms has reshaped the sector, making some companies attractive targets for larger competitors and private equity investors.
In other deal-related news, Google's parent company Alphabet ventured to acquire Wiz for $23 billion before discussions faltered. In October, Reuters reported that Advent, Bain, and EQT were exploring a deal involving another cybersecurity firm, Rapid7.