FireEye kicks off 2014 with $1 billion acquisition of Mandiant

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In a gutsy kick-off to 2013, IT security company FireEye has announced a $1 billion deal to acquire Mandiant, the cyber-forensics specialist that first grabbed headlines in January 2013, when it rooted out Chinese hackers targeting the networks at theNew York Timesand other US companies.

The idea behind the deal is to combine FireEye’s virtual machine monitoring tools with Mandiant’s endpoint security, incident response and mediation technologies. In other words, where FireEye detects attacks, by isolating and analysing incoming traffic in a ‘virtual petri dish’, Mandiant provides the means to respond to them, with its team of highly skilled incident-response experts.

Bringing the two companies together will enable the combined business to offer “the most complete library of actionable threat intelligence on advanced threats and a product suite that can apply that intelligence to detect and prevent attacks on both the network and endpoints,” according to an official announcement from Mandiant.

The price tag of $989.4 million will be met by FireEye issuing 21.5 million shares and options, worth a little under $900 million, and paying Mandiant $106.5 million in cash.

The two companies were already closely linked prior to this link-up: FireEye CEO David DeWalt is a former chairman of Mandiant’s board of directors. They cooperated on projects, too, with Mandiant frequently called in to companies to design countermeasures to attacks detected by FireEye’s software.

“Organisations today are faced with knitting together a patchwork of point products and services to protect their assets from advanced threats,” said FireEye’s David DeWalt, a former CEO of security company McAfee, in an official statement. “Together, the size and global reach of FireEye and Mandiant will enable us to innovate faster, create a more comprehensive solution and deliver it to organisations around the world at a pace that is unmatched by other security vendors.”

The companies said they had agreed the deal on Monday 30 December, but only made it public the following Thursday, after US markets closed. Kevin Mandia, Mandiant's founder and chief executive officer prior to the acquisition, has been appointed as the chief operating officer of FireEye.

Mr. DeWalt said Mandiant booked about $100 million in sales last year. Meanwhile, FireEye, which made its debut on Nasdaq in September 2013, is forecasting revenues of between $159 million and $161 million for the fiscal year just completed.

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