Cellebrite, the Israeli digital intelligence company known for its phone hacking technology, announced Thursday it will go public, becoming the latest Israeli tech firm merge with a shell company to be listed on Nasdaq.
Cellebrtie will merge with a so-called SPAC firm known as TWC Tech Holdings at a valuation of $2.4 billion.
A special purpose acquisition company, or SPAC, is a “blank check” shell corporation that is already a publicly traded company. Merging with a SPAC has become an increasingly popular alternative to rigors of doing an IPO. In Cellebrite's case, the merger will see it receive access to $180 million of the SPAC's capital as well as another $300 million that will be raised from private investments.
As of 2020, Cellebrite, which sells its mobile forensic technology to law enforcement agencies, made roughly $195 million. It will be traded as CLBT.
Cellebrite’s phone-hacking technology is intended for law enforcement agencies and is sold across the world. However, critics have long slammed the company for selling its wares to states with poor human rights records, from China and Hong Kong, to Indonesia and Venezuela, to Saudi Arabia and Belarus.
Though the company has stopped sales to some of these places and vows it only works with law enforcement agencies and does not provide services to countries with severe human rights abuses, recent reports have shown it still has a number of controversial clients.
For example, in mid-March the company announced it would no longer sell its technology to Russia and Belarus after it was revealed their systems – which allows policy to break into locked phones already in their physical possession – was used to hack opposition forces and minorities in the countries.
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In an appeal against Israel's Defense Export Control Agency, Defense Ministry, and Cellebrite, Eitay Mack, a lawyer and human rights activist, together with 80 human rights activists revealed documents that link Cellebrite’s technology with the persecution of political actors as well as minority groups in Russia. Among them Lyubov Sobol, a lawyer for the Anti-Corruption Foundation headed by Alexei Navalny, was mentioned.
After the documents were revealed, Cellebrite called a halt on exports of its technology to Belarus and Russia. In the past, the company denied the sale of technology to the dictatorship, but investigative agencies reported that the Lukashenko administration has purchased and used Cellebrite's hacking technology since 2016.
Haaretz also reported at the beginning of March that Cellebrite sold its technology to Bangladesh’s notorious paramilitary unit. The unit, known as the Rapid Action Battalion, has been called a “death squad” by rights groups and has faced allegations of extrajudicial killings, disappearances and torturing civilians and journalists.
The sale was revealed as part of documents filed by Mack as part of an attempt to get the Defense Ministry to halt the tech firm’s exports to Bangladesh and explain their failure to do so in light of reports regarding misuse of Cellebrite’s UFED (Universal Forensic Extraction Device), a system that allows authorities to unlock and access the data of any phone in their possession.
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