Last month, amid reports that the electronic attack company Paraguce solutions It was acquired by the American private stock company AE Industrial Partners for $ 900 million. The Israeli Ministry of Defense published a dramatic announcement that says: “Contrary to reports that the Ministry of Defense did not agree to sell Paragon.” However, it became clear that when the statement was published, the deal was already completed and the payment was transferred according to the job will of the Ministry of Defense, the Defense Export Control Agency (DECA).
The Ministry of Defense confirmed to “Globes” that it had received an official report from the company on changing ownership – a report that does not require the law except after signing the deal. The Ministry of Defense says, “The Defense Export Monitoring Act states that any change in the identity of the controlled shareholder in a registered company as a defensive source requires a retrospective report to the Ministry of Defense. Based on the report presented, the Ministry of Defense is currently conducting an exam,” says the Ministry of Defense.
The Ministry of Defense version
So why is there a gap between the initial announcement, which means that the deal will be banned, or at least you must overcome obstacles, and the bureaucratic reality?
The advertising content at that time described the procedural process involved in the sale of the electronic attack company, a routine that is currently undergoing the company. According to the source of the industry, “although the content of the advertisement itself was true, its publication itself – this is unusual – because the company was subjected to the usual procedure without any violations.”
“The deal was signed before the Ministry of Defense published this announcement. Everything was made according to protocols and bases.” According to him, this announcement was due to an internal misunderstanding within the ministry. There was no need at any stage to publish such an advertisement, as the deal has already been completed according to the law.
Another source added, “The deal has occurred, and now there is a stage of administrative procedures to register the new ownership in the exporters’ record. Everything was performed 100 % according to Israeli law and its regulatory derivatives by both the company and the Ministry of Defense. “
In response, the Ministry of Defense said, “The Ministry of Defense has received a report from the company about a change in the identity of Christian shareholders in the company. For licensing conditions.
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In the deal, it was agreed that the American Investment Fund will receive Paraguce, which was founded by the former commander of 8200, Dean (Daqqa), Ehud Shanorson, and former Prime Minister Eude Barak, through his Red Lattice, which he owns – the integration that provides solutions to the US Department of Defense Defense ministries in other English -speaking countries. The deal includes a cash payment of $ 500 million, and another $ 400 million is subject to the goals of the meeting.
According to the sources, the money has already been transferred to the company, with estimates that $ 250 million will be divided between 400 employees (20 %) and the five businessmen (30 %), and an additional $ 250 million will be transferred to investors: the American Fund for Battery Projects and the Israeli Red Fund Dot, which is founded by Yorm Oron. The EHud Barak stake in the deal was few, so before taxes that are expected to attend about 10-15 million dollars.
Paragon has adopted a different business model from other electronic attacks early in 2019, amid a crisis at this time at the time. While other companies were facing international criticism of the misuse of their technologies, “the company had previously set a list of about 30 stable democratic countries as its target market,” the source explains.
This commercial step has struck the correct mark – according to the sources, in recent months, the DECA list has reduced the list of approved countries for all electronic attacks in Israel. The new menu is identical to the countries that Paragon chose to work with from its inception.
Israeli supervision
Paragon has developed its “graphite” program, designed to collect intelligence data from encrypted communications applications such as WhatsApp, Telegram and Signal. After the acquisition by the American company, it was decided that Paraguce will continue to work from Israel, while overseeing technology and knowledge under Israeli supervision.
According to a former military source, in response to the establishment of the company by Shenorson, steps were taken in the IDF to prevent the transfer of knowledge from the army to electronic companies, including the temporary ban on employing the company’s employees in reserves.
There was no response from Paraguce to this report.
It was published by Globes, Israel Business News – En.globes.co.il – on January 30, 2025.
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