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.
