Private Equity Firms Compete to Acquire Trend Micro

By Milana Vinn

NEW YORK (Reuters) -Bain Capital, Advent International and EQT AB are among the private equity firms competing to acquire Japanese cybersecurity firm Trend Micro, which has a market value of 1.32 trillion yen ($8.54 billion), according to people familiar with the matter.

The buyout firms have expressed interest in taking Trend Micro private in recent weeks, the sources said, requesting anonymity as the deliberations are confidential. KKR is also an interested party, two of the sources said, cautioning that a deal is not guaranteed and Trend Micro could choose to remain independent.

Shares of Tokyo-based Trend Micro were up more than 12% in early trading in Japan on Thursday after Reuters reported the buyout interest from private equity firms.

A successful takeover of Trend Micro would rank as one of the world's biggest leveraged buyouts in recent months and signal that private equity dealmaking is starting to bounce back, after the pace of debt-fueled buyouts was hit hard by interest rate hikes from central banks to fight inflation in the aftermath of the pandemic.

Trend Micro has been exploring a sale since the company received acquisition interest last year, Reuters previously reported.

Trend Micro did not immediately respond to requests for comment. Bain, EQT, KKR and Advent declined to comment.

Founded in 1988 by technology industry executives Steve Chang, Jenny Chang and Eva Chen as an antivirus software maker, Trend Micro has expanded its offerings to cloud computing, network and endpoint security.

In November, Trend Micro said third-quarter net sales rose 6% to 68.1 billion yen for a 42% jump in operating income to 14.8 billion yen, as its operating margin rose to 24%.

The company's large U.S. rivals include Crowdstrike, Microsoft, Palo Alto Networks and McAfee.

Cybersecurity deal activity has been robust in recent years as large corporations have ramped up spending on security tools. Increased competition among all-in-one cyber platforms has shaken up the industry, making some companies attractive takeover targets for larger rivals and private equity firms.

Last year, Google parent Alphabet attempted to acquire Wiz for $23 billion before the talks fizzled out. Reuters reported in October that Advent, Bain and EQT explored a deal for another cybersecurity firm, Rapid7.

($1 = 154.5500 yen)

(Reporting by Milana Vinn in New York; Additional reporting by Satoshi Sugiyama in Tokyo; Editing by Anirban Sen, Richard Chang and Jamie Freed)