It's time to un-merge a merger.
Cofense investor BlackRock is in advanced talks to take over the Leesburg, Va.-based cybersecurity firm, after a U.S. national security panel asked buyout firm Pamplona Capital Management to sell its stake, Reuters reports.
The Committee on Foreign Investment in the United States, which scrutinizes M&A activity with foreign acquirers for potential national security concerns, hasn't disclosed why it asked Pamplona to sell its 47 percent stake in Cofense. The company offers software and services that protect email users from phishing attacks.
It's a rare, high-profile examples of CFIUS undoing a deal that was already completed. CFIUS launched a pilot program last year to require the review of some investments in U.S. technology companies that it deems critical.
A major investor in Pamplona’s private equity funds is Russian billionaire Mikhail Fridman, who was included in an “oligarchs’ watchlist” by the U.S. Treasury Department, though he has not been hit by U.S. sanctions.
Pamplona decided last October to launch an auction for its stake after being approached by CFIUS. That was 10 months after it acquired Cofense alongside BlackRock and other investors, including Adam Street Partners and Telstra Ventures, for a combined $400 million.
BlackRock currently owns a 30 percent stake in Cofense, which formerly was called Phishme. Sources told Reuters that it's a frontrunner to acquire the stake, and a deal could be reached as early as this week.
