FireEye (FEYE) to Sell Product Business & Name to STG for $1.2B

FireEye FEYE on Wednesday announced that it has agreed to sell its product business, including the FireEye name, to a consortium led by private-equity firm Symphony Technology Group (STG) in an all-cash transaction worth $1.2 billion. The transaction is expected to complete by the end of fourth-quarter 2021.

The deal will separate FireEye’s digital forensics and incident response arm Mandiant from its network, email, and cloud security products. With this transaction, the company undoes its 2014 acquisition which brought Mandiant solutions and FireEye products together.

Notably, FireEye had acquired Mandiant in 2014 for $1 billion and appointed the latter’s founder Kevin Mandia as the combined company’s CEO. The deal will make Mandiant an independent publicly-traded company focusing on cyber-incident response and the cybersecurity testing market.

FireEye, Inc. Price

FireEye, Inc. Price

FireEye, Inc. price | FireEye, Inc. Quote

Respond Software Buyout Boosting Mandiant Capabilities

FireEye has been witnessing strong adoption of its Mandiant solutions. Notably, its Mandiant Threat Intelligence recorded 25% year-over-year revenue growth and the Security Validation solutions delivered strong results in first-quarter 2021.

The company had been focusing on expanding the capabilities of Mandiant. In this connection, it acquired Respond Software, a cybersecurity investigation automation company, in a cash-stock deal worth $186 million, last November.

The buyout has integrated Respond’s cloud-based machine learning with Mandiant Advantage’s expertise to deliver automated investigation alerts at machine speed to customers.

Also, acquisition of Respond Software has enabled Mandiant Advantage to include controls-agnostic AI-driven XDR capabilities, supported by the platform’s front-line intelligence, to help customers identify attacks and respond on time.

Further, the deal will help scale Mandiant’s existing Managed Defense resources by using cloud-based correlation and intelligent data science models to deliver faster and better security outcomes.

Earlier, in October 2020, the company launched the Mandiant Advantage Platform, which includes Threat Intelligence, Security Validation, Managed Defense, and Consulting services.

Zacks Rank & Stocks to Consider

FireEye currently carries a Zacks Rank #4 (Sell).

Better-ranked stocks in the broader technology sector include Lam Research Corporation LRCX, ASML Holding N.V. ASML and Facebook FB, all sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Lam Research, ASML Holding, and Facebook is currently pegged at 32.8%, 29.8% and 20.1%, respectively.

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