SAN
FRANCISCO — In a deal that may have broad repercussions for companies
and governments fending off sophisticated hackers and state-sponsored
digital attacks, FireEye, a provider of security software, has acquired
Mandiant, a company known for emergency responses to computer network
breaches.
The deal, in both cash and stock, is worth more than $1 billion, based on the current value of shares in FireEye.
The
acquisition, which closed on Monday but was not publicly announced
until after the markets closed on Thursday, was one of the biggest
security deals of 2013. It merges two darlings in the $67 billion global
computer security market that together could form a formidable
competitor to antivirus giants like Symantec and Intel’s McAfee.
David
G. DeWalt, FireEye’s chairman and chief executive, ran McAfee before it
was sold to Intel in 2010. Mr. DeWalt was rumored to be a contender for
the top job at Intel, but surprised company insiders when he left to
join FireEye in 2012.
Mandiant
is best known for sending in emergency teams to root out attackers who
have implanted software into corporate computer systems. Much of its
work focused on attacks from China, and last year it made headlines with
a detailed study of a hacking group known as “Comment Crew” that
provided the strongest evidence yet that the hackers were closely linked
to a unit of China’s People’s Liberation Army, outside Shanghai.
The
combination of the two companies — one that detects attacks in a novel
way, another that responds to attacks — comes as corporate America has
become wary of relying on the federal government to monitor the Internet
and warn of incoming attacks.
That
wariness has increased since the revelations of Edward J. Snowden, the
former National Security Agency contractor who removed thousands of
documents before he took temporary refuge in Moscow.
The
documents have made it evident to companies that the United States
monitors allies as well as adversaries, including friendly governments,
international organizations and the networks of some Internet companies.
Some could turn to companies like FireEye and Mandiant for protection,
an interesting twist since many of Mandiant’s employees come from the
American intelligence world.
“After
the Snowden events, in the current political climate, no one can say to
the government, ‘Please, come on in and monitor our networks,’ ” said
Kevin Mandia, the founder of Mandiant who will become chief operating
officer of the combined company.
Mandiant
is privately held, and the big winners in the acquisition will be Mr.
Mandia, the company’s founder, Mr. DeWalt, who joined Mandiant’s board
as chairman in 2012, and the company’s venture backers. Mandiant has
raised $70 million from Kleiner Perkins Caufield & Byers, the
venture capital firm, and One Equity Partners, an investment arm of
JPMorgan Chase.
FireEye’s
success so far has depended on a technology for detecting attacks that
works quite differently from most antivirus products. Most products
monitor the web and identify malicious software that has already begun
to hit victims around the world.
But
by the time the attack has been identified and blocked, the malicious
software has already had a chance to do damage — siphoning a company’s
trade secrets, erasing data or emptying a customer’s bank account.
FireEye’s
software isolates incoming traffic in virtual containers and looks for
suspicious activity in a sort of virtual petri dish before deciding
whether to let the traffic through.
“Companies
are spending tens of billions of dollars of their money on a model that
doesn’t work,” Mr. DeWalt said. “It’s going to take people and products
working together.”
Mandiant
was frequently called in after FireEye found malware. In those cases,
it used its own threat detection technology to determine where the
attack was coming from and to design countermeasures.
In
an interview, Mr. Mandia and Mr. DeWalt said the combined company would
be able to notify its customers as soon as it detected abnormal
behavior, execute a temporary fix and then dispatch a Mandiant team to
take further steps. It will also give Mandiant more reach: FireEye works
with more than a thousand customers, including 40 state military
operations, around the globe.
Mandiant
had $100 million in revenue in 2012, up more than 76 percent from the
previous year. Mandiant responded to attacks by Chinese hackers at The
New York Times and The Wall Street Journal last year. About 95 percent
of its business is domestic and it was just beginning to develop an
international presence.
In
April 2012, the companies began teaming up on various product
initiatives. In February, they began integrating FireEye’s software with
Mandiant’s threat detection products after seeing that many of their
customers were already deploying their products and services together.
Then, a few months ago, the two chief executives started discussing a deal.
On
Monday, the boards of both companies agreed to terms in which FireEye
will pay Mandiant shareholders $106.5 million in cash and 21.5 million
shares and options.
Under
the deal terms, Mandiant will become an operating subsidiary of
FireEye, and Mr. Mandia will oversee FireEye’s services, cloud and
endpoint security operations.
Mr.
Mandia said that before initiating acquisition talks, he had considered
taking Mandiant public. He said he began to warm to the idea of an
acquisition in the last few months, when he saw that FireEye’s detection
products would be a “natural fit” for Mandiant’s expertise in
responding to breaches.
The
market has already shown an enthusiasm for FireEye’s products. Since
the company made its debut on the Nasdaq in September, its stock price
has more than doubled. That has made it the most successful initial
public offering of a security company in 2013 and a big gain for
FireEye’s founder, Ashar Aziz, a former Sun Microsystems engineer who
started the company in 2004, and FireEye’s venture capital backers like
Norwest, Sequoia Capital and In-Q-Tel, the venture arm of the Central
Intelligence Agency, and others.
FireEye now has a $5 billion market capitalization, though it has yet to turn a profit.
On
Thursday, when the company announced the Mandiant acquisition, it also
announced that it had exceeded its fourth-quarter revenue guidance. The
company said it anticipated total revenue for 2013 to be $159 million to
$161 million, compared with previous guidance of $156 million to $158
million. The guidance, and news of the merger, sent FireEye’s stock up
22.5 percent in after-hours trading.
Nicole Perlroth reported from San Francisco and David E. Sanger from Weston, Vt.
end quote from:
"FireEye Computer Security Firm Acquires Mandiant"
Since Fire Eye bought Mandiant I have been hearing rumors of strange web pages showing up on people's computers so I'm wondering what FireEye is up to with Mandiants good name? However, it might just be hackers mad at Mandiant and FireEye teaming up to piss off general users instead to throw anger against the new Mandiant. I think the second is a more likely thing that is happening. And the most likely culprit in this hacking would be from China who Mandiant has revealed a lot of secret information about over the last few years regarding their hacking of U.S. Government, Corporate and military web sites.
end quote from:
"FireEye Computer Security Firm Acquires Mandiant"
Since Fire Eye bought Mandiant I have been hearing rumors of strange web pages showing up on people's computers so I'm wondering what FireEye is up to with Mandiants good name? However, it might just be hackers mad at Mandiant and FireEye teaming up to piss off general users instead to throw anger against the new Mandiant. I think the second is a more likely thing that is happening. And the most likely culprit in this hacking would be from China who Mandiant has revealed a lot of secret information about over the last few years regarding their hacking of U.S. Government, Corporate and military web sites.
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