Google to Buy Cybersecurity Company Mandiant for $5.4 Billion
Mandiant was known as FireEye before it renamed itself last year.
Google is doubling down on cybersecurity, announcing Tuesday that it will buy Mandiant, one of the biggest players in the growing industry, for about $5.4 billion.
Under the terms of the deal, Google will acquire the Reston, Virginia-based company for $23 per share in an all-cash deal expected to close later this year. The price represents a 2.3% premium over the company's Monday closing stock price of $22.49.
Mandiant, which will become part of Google Cloud, is frequently called upon by the world's largest companies to investigate and shore up digital defenses after major data breaches. Up until last year when it rebranded, it was known as FireEye.
"In today's increasing hostile environment, security has never been more important," Phil Venables, Google Cloud's head of information security, said on a call with analysts and reporters.
Venables and Mandiant CEO Kevin Mandia said the combination of Google's cybersecurity analytics with Mandiant's automated defense technology, which is fed by the intelligence learned from its breach investigations, will go a long way toward boosting cloud security at a time when it's sorely needed.
The deal comes in the wake of Russia's invasion of Ukraine. Cybersecurity experts have long predicted that any conflict between the two countries would include cyberattacks that could have a global ripple effect. They've also speculated that Russia could directly target the US or other NATO countries if it feels threatened.
In addition, companies, governments and critical infrastructure all face increasing threats from criminal gangs that seek to extort millions of dollars from them with ransomware and other kinds of cyberattacks designed to shut down their operations.
All of that has boosted demand for cybersecurity professionals when there's already a significant labor shortage in the industry. Increasing automation will help companies get the most out of the people they do have, Mandia said.
Industry observers say there could be more deals like this ahead.
Daniel Ives, an analyst for Wedbush, wrote in a note to investors that, especially given the threat from Russia, the deal could be the start of a "massive phase of consolidation" for the cloud industry, with companies like Amazon and Microsoft now under pressure to "further bulk up" the security of their platforms.
In midday trading, Mandiant shares fell 2.8% to $21.87.