Trend Micro Explores Sale Amid Weak Yen and Market Underperformance

Trend Micro, a Japanese cybersecurity firm, is considering a sale due to buyout interest and a weak yen. Despite net sales and operating income growth in the second quarter, the company's stock has underperformed. Trend Micro aims to attract potential buyers, including private equity firms, with help from investment bankers.

Trend Micro, a Japanese cybersecurity behemoth valued at approximately 950 billion yen ($6.5 billion), is contemplating a sale after drawing buyout interest, sources revealed on Thursday.

Recent yen depreciation and underperformance of Trend Micro shares in comparison to Japanese peers have positioned the firm as a prime acquisition candidate. Investment bankers are aiding Trend Micro in gauging interest from potential buyers, which may include private equity firms. However, sources close to the matter alert that a deal is not guaranteed.

Founded in 1988 by Steve Chang, Jenny Chang, and Eva Chen, Trend Micro initially specialized in anti-virus software but has diversified into cloud computing, network, and endpoint security. Its shares have dipped over 10% this year, lagging behind the broader Japanese market amidst intense competition with U.S. rivals like Crowdstrike and Microsoft. Nevertheless, the company reported a notable 13% increase in second-quarter net sales and a remarkable 42% surge in operating income, with an improved operating margin of 18%.

The cybersecurity industry is witnessing heightened merger and acquisition activities spurred by growing corporate expenditure on security solutions. In a recent example, Google parent Alphabet sought to acquire cybersecurity startup Wiz for $23 billion before the negotiations fell through.

(With inputs from agencies.)