FireEye has agreed sell its fledgling products business to Symphony Technology Group for US$1.2 billion, undoing the 2014 acquisition that brought FireEye’s products and Mandiant’s services together.
The platform security vendor said its high-growth threat intelligence and incident response services business will continue to operate as a publicly traded business under the Mandiant Solutions banner. In addition to purchasing the company’s network, email, endpoint and cloud security portfolio, private equity firm STG also acquired the FireEye name.
“After closing, we will be able to concentrate exclusively on scaling our intelligence and frontline expertise through the Mandiant Advantage program, while the FireEye Products business will be able to prioritize investment on its cloud-first security product portfolio,” FireEye CEO Kevin Mandia said in a statement.
STG has moved aggressively into cybersecurity over the past year, purchasing encryption pioneer RSA in September 2020 for US$2.08 billion and agreeing in March 2021 to buy McAfee’s enterprise business for US$4 billion. There is significant overlap between the McAfee and FireEye product portfolio, particularly in the network, endpoint, and cloud security domains.
“We are extremely impressed by the FireEye Products business and the mission critical role it plays for its customers,” STG Managing Partner William Chisholm said in a statement. “We believe there is enormous untapped opportunity for the business that we are excited to crystalize by leveraging our significant security software sector expertise and our market leading carve-out expertise.”
Wednesday’s proposed transaction undoes FireEye’s US$1 billion acquisition of Mandiant in January 2014, which brought together network security technology designed to catch what more traditional firewalls missed with industry-leading incident response capabilities. Mandia founded Mandiant in 2004, and served as FireEye’s COO for two-and-a-half years after the deal before becoming CEO in June 2016.
FireEye’s stock is up US$0.17 (0.75 percent) to US$22.70 in after-hours trading Wednesday. In addition to the company’s point products, STG will also acquire FireEye’s security management and orchestration platform. The sale of FireEye’s products business is expected to close by the end of 2021.
After the deal closes, FireEye and Mandiant will continue to share technology, telemetry, threat intelligence, and expertise through a reseller and market cooperation agreement, a transition services agreement, and a strategic collaboration agreement. FireEye’s products business will also benefit from better channel relationships with MSSP providers based on alliances with complementary vendors.
FireEye’s product, subscription and support business saw meagre growth of 2.2 percent in 2020, with revenue increasing to US$724.9 million from US$708.8 million a year earlier. Conversely, the company’s professional services business - which prominently showcases Mandiant’s services offerings - saw sales skyrocket to US$215.6 million in 2020, up 19.6 percent from US$180.3 million a year earlier.