Private Equity Giants Eye Trend Micro Acquisition in Multi-Billion Dollar Deal

Tokyo-based cybersecurity firm Trend Micro is reportedly being courted by private equity heavyweights Bain Capital, Advent International, and EQT AB for a potential acquisition. The Japanese company currently boasts a market capitalization of 1.32 trillion yen ($8.54 billion).

Sources familiar with the matter reveal that the private equity firms have recently expressed interest in taking Trend Micro private. KKR is also said to be involved, although a deal is not guaranteed. Trend Micro could ultimately opt to remain independent.

The news has caused Trend Micro's shares to soar by over 12% in early trading on Thursday in Japan. A successful acquisition would rank among the largest leveraged buyouts globally in recent months. It would also signal a resurgence in private equity dealmaking, which has been impacted by interest rate hikes aimed at curbing inflation.

Trend Micro has reportedly been exploring a sale since last year after receiving acquisition interest. The company did not immediately respond to requests for comment, while Bain, EQT, KKR, and Advent declined to comment.

Founded in 1988 as an antivirus software developer, Trend Micro has since expanded its offerings to encompass cloud computing, network, and endpoint security. In November, the company reported a 6% increase in third-quarter net sales to 68.1 billion yen and a 42% jump in operating income to 14.8 billion yen.

Trend Micro faces competition from major U.S. rivals such as Crowdstrike, Microsoft, Palo Alto Networks, and McAfee. The cybersecurity industry has witnessed robust deal activity lately due to increased spending by corporations on security tools. Competition among all-in-one cyber platforms has made some companies attractive acquisition targets for larger players and private equity firms.

Last year, Alphabet's Google attempted to acquire Wiz for $23 billion, but the talks ultimately collapsed. Reuters reported in October that Advent, Bain, and EQT were exploring a deal for another cybersecurity firm, Rapid7.