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JERUSALEM, May 28 (Reuters) - U.S.-based software company Verint Systems is in talks to merge its security division with Israeli cyber surveillance firm NSO Group in a deal worth about $1 billion, a source close to the negotiations said on Monday.
The transaction, if completed, would create one of the world's largest cyber companies. NSO would remain an independent company as a new division within Verint, said the source, who spoke on condition of anonymity.
The source also said the deal would likely be signed in the coming days.
NSO declined to comment while Verint was not available outside U.S. business hours. The talks were first reported by the Wall Street Journal.
NSO is best known as a suppliers of mobile surveillance tools to governments and law enforcement agencies. The company, founded in 2009 by Omri Lavie and Shalev Hulio, was in the spotlight last year amid allegations the Mexican government has used its Pegasus mobile spyware to target private citizens.
The WSJ reported that under the proposed deal, Verint has offered to pay private equity firm Francisco Partners, which is NSO's controlling shareholder, with its own stock and assumed debt.
The newspaper said Francisco Partners, which paid $120 million to buy a majority stake in NSO in 2014, would become the largest shareholder in Verint if the deal is completed.
Israeli media reported last July that Blackstone Group was in talks to buy part of NSO but sources told Reuters that the U.S. private equity firm pulled out of those discussions a month later.
Verint shares have risen more than 5 percent this year and closed at $44.05 on Friday, valuing the company at $2.82 billion. (Reporting by Steven Scheer; Additional reporting by Ismail Shakil in Bengaluru Editing by Jeffrey Heller and Jane Merriman)