Google (NASDAQ: GOOG) has confirmed plans to purchase cybersecurity firm Mandiant. Rumors had been circulating about a number of Big Tech firms looking to acquire the company earlier in the week, and it appears Google beat out all of its opposition.
Its prize? A deal valued at roughly $5.4 billion, with the firm paying $23 per share in cash to take control of the business. This marks Google’s second-largest acquisition, only being surpassed by the purchase of Motorola Mobility for $12.5 billion in 2011. The deal is expected to close before the end of the year, with regulatory issues not currently expected.
What does Mandiant do?
Mandiant is a cybersecurity company that specializes in incident response and cyber-intelligence. The firm rose to prominence in early 2013 following its release of a report that directly implicated China in cyber espionage. Later that year, the firm was purchased by FireEye for a fee of $1 billion. However, last year saw Mandiant return to the public market following FireEye selling off much of its products to a consortium, leaving Mandiant to fend for itself.
The company typically investigates major security breaches for large firms. It utilizes advanced research capabilities to identify potential threats and combines this with a rapid incident response service that can offer protection to businesses from unwanted online intrusions.
Why does this matter to investors?
Having beaten Microsoft in its pursuit of Mandiant, Google will now be hoping the deal will close the gap between the two companies’ cloud-services divisions. Microsoft has been internally working on threat intelligence for years and has made some pointed acquisitions in recent years to bolster this segment.
Adding Mandiant gives Google the potential to have a “profound impact” on cloud security going forward according to Google Cloud CEO, Thomas Kurian. The move follows the addition of Israeli cybersecurity firm Siemplify only earlier this year. Google is clearly willing to invest heavily in an area it knows its competitors have an advantage.
While this purchase is unlikely to have Google’s cloud infrastructure overtaking Microsoft’s Azure or even Amazon’s AWS any time soon, it does show investors that Google is refusing to lose any more ground in an industry still ripe for growth
Financial Writer at MyWallSt
Pádraig’s favorite stock is Nike. Growing up as a sports fanatic, seeing Nike collaborate with athletes like Jordan, Lebron, and Ronaldo inspired him and cemented the brand in his mind. Now, despite having failed miserably in his attempts to earn a fabled Nike sponsorship, he still believes in the innovation and creativity behind Nike and is convinced they will only grow stronger as the world's leading sports brand.