Bloomberg News

FireEye Shares Set Record After $1.05 Billion Mandiant Purchase

January 03, 2014

Mandiant Chief Security Officer Richard Bejtlich

Mandiant Corp. Chief Security Officer Richard Bejtlich. Photographer: Julia Schmalz/Bloomberg

Technology company FireEye Inc. (FEYE:US) climbed to a record in trading a day after it acquired closely held Mandiant Corp. in a deal worth $1.05 billion.

The shares, which increased as much as 33 percent to $54.88 today, has more than doubled since FireEye’s initial public sale in September. The shares traded at $53.61 at 12:12 p.m. in New York.

The acquisition of Alexandria, Virginia-based Mandiant is the latest move to consolidate providers of services that protect computer networks against hackers and spies. It will expand the offerings of Milipitas, California-based FireEye, which was funded in part by the U.S. intelligence community. Services provided by the combined company probably will lead to the discovery of compromised networks, executives said.

“It’s really a combination of people and products that make the difference in today’s attack landscapes,” David DeWalt, chairman and chief executive officer of FireEye, said yesterday on a conference call.

The deal, which was completed Dec. 30, followed Cisco Systems Inc. (CSCO:US)’s $2.7 billion acquisition in October of Sourcefire Inc., based in Columbia, Maryland.

In-Q-Tel, a venture-capital firm started by the Central Intelligence Agency to back companies with emerging national-security technology, invested in FireEye in 2009. The company raised $304 million in an initial public offering that sold at above the marketed price range.

Mandiant, which specializes in malware detection and incident response, in February released a report linking the Chinese army to a coordinated campaign of hacking attacks against U.S. companies and government agencies.

NSA Spying

The deal follows debate in Congress and comments by President Barack Obama on limiting spying by the National Security Agency. The agency tapped fiber-optic cables abroad to siphon data from Google Inc. and Yahoo! Inc., circumvented or cracked encryption, and gathered billions of records showing the locations of mobile phones around the world, according to media reports based on documents leaked by former U.S. government contractor Edward Snowden.

FireEye said its 2014 revenue will be $400 million to $410 million as a result of the Mandiant deal, up from its forecast for $159 million to $161 million in 2013.

FireEye plans to integrate Mandiant technology that includes network sensors and malware signatures into products it sells to about 1,500 customers in 40 countries, DeWalt said.

The combined services offered by the new company could lead to the discovery of compromised networks, Kevin Mandia, Mandiant’s founder, said on the conference call.

“What customers want and what this platform is going to provide folks is real-time detection of advanced threats,” he said.

Mandiant has about 500 customers and generated about $100 million in sales in 2013, DeWalt said.

“This intelligence is very powerful when combined and you suddenly have a plethora of information that no single vendor had before,” he said. “The gold mine here is this combined intelligence.”

To contact the reporter on this story: Chris Strohm in Washington at cstrohm1@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net


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Companies Mentioned

  • FEYE
    (FireEye Inc)
    • $30.56 USD
    • -0.89
    • -2.91%
  • CSCO
    (Cisco Systems Inc)
    • $25.17 USD
    • 0.05
    • 0.2%
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