Cybersecurity firm Trend Micro explores sale, sources say

Trend Micro Incorporated

08/08/2024 18:53

(Adds company statement, share reaction)
    By Milana Vinn
       Aug 8 (Reuters) - Trend Micro  4704.T , a Japanese
cybersecurity firm with a market value of about 950 billion yen
($6.5 billion), is exploring a sale after attracting buyout
interest, people familiar with the matter said on Thursday.
    The deal deliberations come as a weakening of the yen in the
last few weeks, and Trend Micro's stock underperformance
compared to Japanese peers, have made it an acquisition target.
    Trend Micro is working with investment bankers to solicit
interest from potential buyers, which include private equity
firms, the sources said, cautioning that no deal is certain.
    The sources requested anonymity because the discussions are
confidential. 
    Trend Micro's American Depositary Receipts (ADRs) jumped
nearly 10% on the news on Thursday. 
    A company spokesperson declined to comment on the sale
process. 
        "As a market-leading publicly traded cybersecurity
company, we remain focused on business transformation and
customer expansion through our industry-leading AI platform,"
the spokesperson said. 
  
    Founded in 1988 by technology industry executives Steve
Chang, Jenny Chang, and Eva Chen as an anti-virus software
maker, Trend Micro has expanded its offerings to cloud
computing, network, and endpoint security. 
    Trend Micro's shares have lost more than 10% of their value
since the start of the year, underperforming the broader
Japanese market and many of its peers, as the company battles to
improve its profitability while competing with large U.S. rivals
such as Crowdstrike  CRWD.O , Microsoft  MSFT.O  and Palo Alto
Networks  PANW.O .
    The Tokyo-based company has been seeking to take market
share from Crowdstrike after a global outage last month caused
by a Crowdstrike software update crashed more than 8 million
computers and wrecked havoc from aviation to healthcare.
    Earlier on Thursday, Trend Micro reported a 13%
year-over-year increase in second-quarter net sales to 68.6
million yen and an even bigger 42% rise in second-quarter
operating income to 12.3 million yen, which it attributed to
improving its operating margin to 18%.
    Dealmaking in the cybersecurity industry has been on the
rise amid an increase in spending on security software from
large global corporations. In July, Google parent Alphabet
attempted to strike a $23-billion deal to buy cybersecurity
startup Wiz before the talks fizzled out. 

 (Reporting by Milana Vinn in New York
Editing by Nick Zieminski)
 ((Anirban.Sen@thomsonreuters.com; Twitter: @asenjourno; Reuters
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