Israeli spyware company NSO Group was valued at $ 2.3 billion by analysts at EY Luxembourg last year, shortly before the company needed a hefty emergency loan and its equity was labelled “worthless”.

This is reported by the Financial Times, which has reviewed documents on the valuation. Analysts from EY Luxembourg came up with a rating for NSO in July 2021 that was more than twice as high as a rating that the spy company received two years earlier.

Despite falling sales of NSO, EY analysts described the company as “market leader”, although competitors, on the contrary, grew. EY’s valuation would have been made without visiting NSO or verifying information provided by NSO analysts, the FT said.

EY’s valuation was also much higher than a potential buyer of NSO had handled several weeks earlier, in a failed attempt to take a minority stake in the spyware company. Then a value of $ 1.6 billion was assumed, including $ 500 million in debt.

NSO is known for the cyber software Pegasus, intended to be able to track criminals, but in practice also used to track activists, journalists and politicians. The valuation by EY Luxembourg was drawn up just around the time this abuse of Pegasus came out.

NSO’s private equity owner was also involved in a legal battle with Facebook parent company Meta, around the hacking of Meta subsidiary WhatsApp. NSO was subsequently blacklisted in the US.

Consulting firm Berkeley Research Group, called in to liquidate the private equity fund, subsequently concluded that NSO’s equity was worth nothing. Investment banks and defense officials are now again trying to assess the value of NSO, in order to be able to divest the core business of the spyware company to a US defense specialist.

EY and NSO declined to comment to the Financial Times.