Market Overview

FireEye Surges on Acquisition Deal

Investors of FireEye (NASDAQ: FEYE) are off to a great start in 2014.

On Friday, cyber security firm FireEye announced it has acquired Mandiant, a computer forensics specialist firm in a $1.05 billion deal.

Mandiant is most famous for releasing a report in February 2013 documenting evidence of cyber attacks by a secretive Chinese military unit (known as APT1) on U.S. companies.

The acquisition brings together two of the most respected executives in the cyber security industry.

FireEye's Dave DeWalt a former chief executive at McAfee has over 25 years of industry experience. Mandiant's Kevin Mandia is a retired military cyber-crime investigator, who revealed to the world a 76 page report based on seven years of research detailing the worldwide scope of Chinese government sanctioned hacking.

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The two companies have worked together in the past and have entered a technology development agreement making it easier to deploy their products together. DeWalt previously referred to Mandiant's team of experts as being “Navy ‘cyber' Seals.” The majority of Mandiant's staff consists of retired intelligence and law enforcement agents specializing in computer forensics.

Raising guidance

FireEye has yet to become a profitable company, but raised its guidance following the acquisition announcement.

The company raised its fourth quarter 2013 guidance with billings now pegged at $95 million to $100 million, compared to a previous guidance in the $82 million to $86 million range. The company is also projecting higher revenues in a $55 million to $57 million range from a previous projection of $52 million to $54 million.

FireEye also raised its 2014 outlook, which includes the Mandiant acquisition. The company sees full-year billings in a $540 million to $560 million range, higher than previous estimates of $350 million to $370 million. Revenue projections now stand at $400 million to $410 million, up from previous projections of $240 million to $250 million.

Several analysts viewed the deal as a strategic positive for FireEye. One analyst from Nomura suggested the deal will usher in a wider entry by FireEye into the IPS sector.

Shares of FireEye were trading higher by more than 30 percent in Friday morning's trading action.

Posted-In: APT1 Chinese Hacking CybersecurityNews Contracts Management Hot Markets Best of Benzinga

 

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