Antivirus developer Trend Micro gets a booster shot from Softbank, which has taken a 35 percent stake in the private company.
Trend Micro, which expects to generate annual revenues of $40 million and has continually posted a profit since its founding in 1988, said the Softbank deal is its first with an outside investor.
"In the past, we internally funded our growth," said Robert Lowe, executive vice president of Trend Micro's U.S. subsidiary. "But now we want resources and relationships that will accelerate our growth."
Terms of the deal were not disclosed. But Lowe said the infusion of capital will enable Trend Micro to double its U.S. marketing efforts, where it ranks third in antivirus software behind McAfee (MCAF) and Symantec (SYMC).
The investment may also be used to acquire companies or technologies to grow Trend Micro, Lowe said. He added that the Softbank relationship may also provide a channel to ask its large minority stakeholder to shell out more funds to make investments or acquisitions that could have a side benefit to Trend Micro.
In addition, he said, the Softbank relationship may provide opportunities for the company to work with other technology firms that have received an investment from Softbank. "We think there will be opportunities to do packaged solutions for the corporate world," Lowe said.
Under the deal, Trend Micro's management will remain in place, and discussions are under way about whether Softbank will receive a board seat.
"Our investment in Trend Micro demonstrates our commitment to own and influence key parts of the Internet infrastructure," said Masayoshi Son, Softbank chairman, president, and chief executive, in a statement. "The Internet is clearly the future for business communications, and technologies like Trend Micro's ensures that corporations can use it safely."
The Trend Micro investment marks Softbank's latest Internet infrastructure deal, which has included investments in Yahoo, CyberCash, and USWeb.
Meanwhile, Trend Micro is negotiating another deal with a large investor, which is interested in taking a five percent stake in the company, Lowe said, declining to give further details.
Trend Micro is considering an initial public offering in 1998, but it will be floated in Japan.
"Most of our revenue comes from Japan, so it makes sense to go public in an area where your core revenues are derived and people are familiar with you," Lowe said. And in Japan, he said, "it's not unheard of to get 80 times earnings for an IPO."