Google acquires cybersecurity service provider Mandiant for $5.4 billion
Google LLC today announcement that it is acquiring Mandiant Inc., a publicly traded cybersecurity services provider, for approximately $5.4 billion.
The announcement comes a day later reports have emerged that Google was in acquisition talks with Mandiant. It was earlier reported that Microsoft Corp., one of Google’s main competitors, had also expressed interest in buying the cybersecurity company.
Nasdaq-listed Mandiant helps organizations respond to data breaches in their IT environments. Mandiant determines which systems within a company have been affected by a breach, removes malware used by hackers, and takes action to prevent similar cyberattacks in the future. According to Mandiant, its employees spend more than 200,000 hours per year responding to cyberattacks.
Google plans to integrate Mandiant into its Google Cloud business.
“Organizations around the world are facing unprecedented cybersecurity challenges as the sophistication and severity of attacks that were once used to target large governments are now being used to target businesses across all industries,” said Thomas Kurian. , chief executive of Google Cloud, in a statement. “We look forward to welcoming Mandiant to Google Cloud to further enhance our security operations suite and consulting services, and help our customers solve their most important security challenges.”
Mandiant’s expertise in cybersecurity is intended to enhance Google Cloud’s value proposition in several ways.
In addition to helping organizations respond to breaches, Mandiant also provides other types of cybersecurity services. One of the company’s focus areas is helping enterprises detect and remediate vulnerabilities in their IT infrastructure, including public cloud environments. Google Cloud said Mandiant’s vulnerability remediation services will complement its Security Command Center product to detect security issues in cloud environments.
Another area where Mandiant competes is in the threat intelligence segment. The company has a team of over 300 researchers who focus on gathering information on hacker activity. Mandiant provides this data to organizations, which use it to track online threats and adapt their cybersecurity efforts accordingly.
It should also be noted that Mandiant has a presence in the fast growing segment of Managed Detection and Response or MDR. The company helps organizations’ internal IT teams detect and respond to potential breaches.
“Following Google’s recent acquisition of Siemplify for security orchestration, automation and response [SOAR]Mandiant’s acquisition is another clear signal that Google is serious about growing revenue from its security division, which is part of the Google Cloud business,” said Neil MacDonald, VP and Distinguished Analyst at Gartner. Inc., at SiliconANGLE.
In particular, he explained, Google benefits from extensive cloud-based detection and response or an XDR platform as well as MDR services. This is in addition to its Chronicle security information and event management platform, or SIEM, and SOAR capabilities to deliver a modern security operations center platform for large enterprises, and with capabilities XDR and MDR for midsize businesses.
“By improving its security capabilities and brand awareness as a standalone security vendor, Google also benefits by further helping to remove security as a barrier to GCP adoption,” he said. .
In a sign of the rapid growth of the managed cybersecurity services segment, at least three market players have raised nine digits financing rounds at unicorn ratings over the past year. One such player, Arctic Wolf Inc., saw recurring revenue growth of 438% year-over-year at the time of its funding round. The acquisition of Mandiant will allow Google to increase its presence in this growing market.
Mandiant was launched in 2004 and until recently offered not only cybersecurity services but also software products such as malware detection tools. Last year the company sold most of its software products to a consortium led by private equity firm Symphony Technology Group. Mandiant was known as FireEye prior to the deal.
Although Mandiant unloaded most of its products last year, the company still provides Automated Defense, a software tool to detect and respond to breaches. The tool will help expand Google Cloud’s portfolio of cybersecurity products.
Automated Defense prioritizes potential cybersecurity issues detected by an organization’s threat detection systems based on their severity. This helps IT staff prioritize the most urgent incidents. When deployed with certain third-party software products, Automated Defense also enables the creation of automation workflows that can respond to a potential breach without the need for manual input.
Google expects to complete the acquisition of Mandiant later this year. The acquisition price of $5.4 billion is net of cash and amounts to $23 per Mandiant share. That’s a significant premium to Mandiant’s closing price of $15.06 on Feb. 7, the day before Microsoft announced its bid for the company.
Beggar reported revenue of $133 million for the quarter ended Dec. 31, a 21% improvement over 12 months earlier and better than analysts’ expectation of $131.5 million. In the current fiscal year, the company expects to generate sales of between $555 million and $565 million, compared to $493 million in fiscal 2021.
With reporting by Robert Hof