The offensive cyber company founded by Ehud Barak and 8200 executives is going to Wall Street

Paragon was sold for $900 million two years ago to the American private equity fund AE, which focuses on defense tech, and merged with one of its subsidiaries, the Virginia-based cyber company REDLattice.

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Now the merged activity, of which Paragon is the major part, is about to merge with Spak, for the purpose of expanding its business beyond the world of intelligence and involvement in larger projects with governments. According to industry estimates, the company is asking for a value of 1.5-2 billion dollars, and the SPAC merger is accompanied by the investment banks Goldman Sachs and Jefferies.

Paragon currently accounts for 85% of the revenues of AE’s combined operations. The two companies together brought in 267 million dollars during the last year, with the Israeli company generating more than 200 million dollars of it. The company employs a total of 750 people, of which 650 are in Israel and the rest in the US. The annual growth rate in revenues was 29% compared to the previous year.

Sold for 900 million dollars

Paragon was sold at the end of 2024 to AE for $900 million, of which $500 million was transferred in cash to the venture capital funds behind it – such as the American Battery and the Israeli Red Dot – as well as to entrepreneurs, and another $400 million was transferred over the past two years in accordance with meeting business goals. According to the assessment, despite Paragon’s decision to stop the service to the Italian government after the revelation of the case of surveillance of journalists in the country, the company met its goals.

The company does not specify who its clients are, apart from the fact that it serves democratic and liberal countries in Western Europe, the US and the Pacific region. According to the Cyber Citizen Love Lab of the University of Toronto, which usually exposes the activities of Israeli cyber companies, in 2025 Paragon served countries such as Australia, Canada, Cyprus, Denmark and Singapore. In the past, Paragon held a contract with an enforcement agency The American immigration ICE, but the Ministry of Homeland Security in the country admitted to the news site NPR that the contract with the Israeli-American company has ended.

Paragon, like its Israeli competitor NSO, allows governments or security forces in various countries to implant surveillance software in the smartphones or computers of suspects without their knowledge, and extract intelligence information such as correspondence, documents or conversations from them. While NSO became famous for “Pegasus”, competitor Paragon markets “Graphite”. Paragon has announced that it allows governments or security forces to track suspects involved in terrorism or crimes only in the event of a court order. According to the “Benzatin” news site, it stopped providing the service to the Italian government after it refused to cooperate in a joint investigation of the case of surveillance of journalists and social activists in the country.

Changes in the industry

The offensive cyber industry has undergone transformations over the past few years: the Biden administration imposed export restrictions on the Israeli industry – it reduced the ability to export software in the field to countries that are not liberal democracies and blacklisted NSO and Kendiro, which has since been sold at a loss. Paragon emerged unscathed from the move and became Israel’s largest company in the field, although it was eventually sold to an American company with ties to the federal intelligence agencies.

Paragon’s activities have also been criticized: the investor Michael Eisenberg, now an adviser to Prime Minister Netanyahu, previously attacked the company and claimed that its managers endangered the security of the state and damaged the capabilities of the 8200 intelligence unit following the vigorous recruitment of workers from the ranks of the army. Barak and Schnavarson threatened to sue Eisenberg in a defamation lawsuit and demanded a public apology and a payment of NIS 10 million, to be donated to public causes – but as far as is known, there is no significant progress in the case.

It seems that AE is now interested in raising funds for the merged Red Lattice to expand its activities in government projects, among other things for products designed to protect against AI attacks and even for forensics products – that is, hardware and software tools for analyzing crimes and attacks – with the aim of winning additional government contracts or expanding existing contracts. The move was made only two weeks after Celebrity – itself a forensics company in the field of terrorism and crime – made a U-turn and became an American company from Israel.

“Israel will remain at the heart of the activity”

The company stated: “This move is intended to expand Paragon’s activities in the American market and the current agreement is the next step in that growth strategy. As part of a public company, Paragon is expected to expand its activities globally, increase its investments in technology, products and artificial intelligence, and make strategic purchases.”

Paragon also added that “Israel will remain at the heart of the company’s activities. As stipulated when Paragon was sold as a private company, Israel will continue to be the company’s center of research, development and innovation even after the transaction is completed. The technology, knowledge and activities from Israel will continue to underpin Paragon’s activities and growth. The transition to operating as part of a public company does not change its identity and its commitment to continue operating from Israel. The move is also expected to strengthen the relationship with customers The company, through the expansion of investments in products, support and innovation and the deepening of long-term collaborations. Paragon emphasizes that its commitment to activities with democratic governments and security and law enforcement bodies, to compliance with Israeli and international regulations and to the implementation of strict control mechanisms will continue to be at the core of its activities.”