Cybersecurity Provider FireEye Acquires Mandiant in $1 Billion Deal

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FireEye announced this week that it has acquired Mandiant for $1 billion. FireEye is paying 21.5 million shares and $106.5 million in cash for Mandiant, for a total sticker price of $989.4 million, although at the end of trading on Monday, when the deal closed, the share value had risen to push the total value over $1 billion.

Mandiant raised its public profile in early 2013, when it exposed China’s state-sponsored hacking arm in a report.

Both companies are much younger than industry titans like Symantec, but both are growing quickly. FireEye’s threat prevention platform yielded an increase in revenue for 2013 of over 90 percent. Mandiant’s automated end-user threat response platform generates over $100 million in annual sales, according to FireEye CEO Dave DeWalt, which would peg the acquisition at about 10 times Mandiant’s revenue.

While FireEye has yet to post a profit, Mandiant has already done so, according to the Globe and Mail. FireEye and Mandiant had previously agreed to a technology development agreement, an acknowledgement that customers seeking advanced protection would benefit from using both platforms in concert.

“What we’re able to do now is go from basically alert to detection to a fix in minutes or seconds,” DeWalt said. “If FireEye detects a breach, we can immediately communicate that to the Mandiant platform and essentially verify scope on all of the computers.”

The ongoing evolution of networks, business needs, and government involvement in cybersecurity are all boosting new-school, non-signature based data security companies.

“The conversation around Microsoft and the NSA, or others who had relationships with them, is only creating more opportunities for companies like us,” DeWalt was quoted as saying in the Washington Post.

FireEye’s platform monitors networks and detects intrusions and malware in the cloud.

FireEye released a report in November suggesting that advanced threat campaigns may involve seemingly unrelated attacks.

FireEye had a successful IPO in September, and its share price has climbed since. In Friday’s early trading, FireEye had jumped again with news of the Mandiant acquisition, surpassing $53 per share, and reflecting confidence in the business community that by combining forces FireEye and Mandiant will become one of the global leaders in cybersecurity solutions.

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