FILE PHOTO: A Google logo is seen outside of the Google Store, where visitors can try phones and other products from the company, in New York City, New York, U.S., February 10, 2022. Picture taken February 10, 2022. REUTERS/Paresh Dave
Alphabet Inc’s Google is paying $5.4 billion for cybersecurity firm Mandiant Inc in a deal that could have a “ripple effect” as cloud rivals Microsoft and Amazon (NASDAQ:AMZN) increase their efforts to fortify the fast-growing business.
A transition to remote working during the pandemic, and also the Russia-Ukraine conflict, has fueled a surge in cyberattacks and boosted requirement for security software, which is expected to more than double to $352.25 billion by 2026 from 2020, according to Mordor Intelligence.
As per news reports, Microsoft Corp (NASDAQ:MSFT) was also interested in Mandiant, which has surfaced as a go-to for businesses probing cyberattacks, such as recent breaches at News Corp (NASDAQ:NWSA) and Nvidia (NASDAQ:NVDA) Corp.
The agreement will strengthen Google’s cloud computing business, which generates more than $19 billion in revenue per year, as well as its security operations and advisory services.
Google’s $23 per share offer represents a premium of approximately 53% over Mandiant’s stock price levels prior to reports of Microsoft’s interest in a deal. Mandiant shares were down 3% in early Tuesday trading, while Alphabet (NASDAQ:GOOGL) was up 0.5 percent.
Mandiant is an American cybersecurity firm that is publicly traded. It gained notoriety in February 2013 when it issued a report directly accusing China of cyber espionage. Mandiant was acquired by FireEye for more than $1 billion in stock and cash on December 30, 2013. Mandiant sold the FireEye product line, name, and approximately 1300 employees to Symphony Technology Group for $1.2 billion in June 2021, after 7 years of stagnant growth under parent company FireEye.