FireEye to acquire cybersecurity firm for $1bn

//FireEye to acquire cybersecurity firm for $1bn

FireEye to acquire cybersecurity firm for $1bn

Mandiant rose to prominence when it published a report linking China to cyber-attacks on US companies

Cybersecurity company FireEye has acquired Mandiant, the computer forensics specialist best known for unveiling a secretive Chinese military unit believed to be behind a series of hacking attacks on US companies.

FirEye shares jumped more than 20% after the announcement of the $ 1.05 billion cash-and-stock deal, which FireEye said closed on Monday.

It unites two companies with relatively new technologies for thwarting cyber attacks, and brings together two of the most-respected executives in the security industry: FireEye CEO Dave DeWalt and Mandiant founder Kevin Mandia.

Both Mandiant and FireEye have operations in Ireland, having established offices here last year.

FireEye opened its EMEA technical support centre in Cork city in March 2013 promising up to 150 jobs, while Mandiant’s European engineering and security operations centre opened in October in Dublin with the creation of up to 100 positions.

While sales of older anti-virus products have been on the decline, security experts expect strong growth in both FireEye’s cloud-based systems for detecting malicious software and Mandiant’s software that analyses cyber attacks.

About a year ago the two companies entered into a technology development agreement that made it easier to deploy their products together.

With the merger, FireEye will gain Mandiant’s team of forensics investigators.

“They have these very strong Navy ‘cyber’ Seals who respond to breaches and are very good at what they do,” Mr DeWalt said about Mandiant. He had previously served as chairman of Mandiant’s board.

“My aim is to create the strongest security company in the world,” Mr DeWalt said in an interview.

FireEye, which has yet to post a profit, said the acquisition will be immediately accretive to earnings and expects the combined company’s revenue to grow about 50% this year.

In comparison, Symantec Corp, the biggest maker of anti-virus software, has said it expects fiscal 2014 revenue to drop 3-4%.

Mandiant is best known for its forensics services.

The company rose to prominence in February 2013 when it published a report detailing what it said were links between a Shanghai-based unit of the People’s Liberation Army and a long list of attacks on US companies.

Beijing denied all allegations in the report.

“If you combine FireEye’s advanced persistent threat technology with Mandiant’s endpoint protection, it really makes them a major force in the cyber-security industry,” said FBR analyst Daniel Ives.

Mandiant, which has long been profitable, generates sales of more than $ 100 million a year, according to Mr DeWalt.

Meanwhile, FireEye announced preliminary revenue for the fourth quarter above its previous estimate.

It said fourth-quarter revenue would be between $ 55 million and $ 57 million, compared to its previous estimate of between $ 52 million to $ 54 million.

Mr DeWalt has declined to say when he expects the company to be profitable.

FireEye, which has a market capitalization of around $ 5 billion, will pay for Mandiant with a combination of stock and cash.

It issued 21.5 million shares and options, which were worth $ 939 million on Monday, when the stock closed at $ 43.69.

RTÉ News – Business Headlines

By | 2014-01-04T19:26:07+00:00 January 4th, 2014|Business|0 Comments