Google (Nasdaq: GOOG) will acquire cybersecurity company Mandiant, Inc. (Nasdaq: MNDT), where it will join Google Cloud and strengthen the tech giant’s security offerings to customers in the second-largest deal for Google, per filings.
Pursuant to the deal, Google will pay $23.00 cash per share, valuing Mandiant at approximately $5.4 billion. This represents a 57% premium to the 10-day trading volume weighted average price as of February 7, 2022, before reports emerged of Microsoft’s interest in the company; on February 7, the closing price was $15.06.
According to the filings, Mandiant offers “frontline expertise and industry-leading threat intelligence.” Google Cloud is doubling down on its security commitments with the acquisition of Mandiant, which will further Google Cloud’s “commitment to advancing its security offerings to better protect and advise customers across their on-premise and cloud environments.”
Mandiant reportedly responds to thousands of security breaches each year and The Information reports that Mandiant was responsible for discovering the SolarWinds hack. The Wall Street Journal highlights how Mandiant was “a pioneer in the cybersecurity industry by publishing detailed reports about malicious cyber campaigns and identifying the likely nation-state sponsor of the intrusions.”
“The Mandiant brand is synonymous with unmatched insights for organizations seeking to keep themselves secure in a constantly changing environment,” Thomas Kurian, CEO, Google Cloud, said in a press release. “This is an opportunity to deliver an end-to-end security operations suite and extend one of the best consulting organizations in the world. Together we can make a profound impact in securing the cloud, accelerating the adoption of cloud computing, and ultimately make the world safer.”
As noted in the filings, this transaction will complement Google Cloud’s security allowing the companies to “deliver an end-to-end security operations suite.” According to Google’s press release, this includes advisory services, threat detection and intelligence, automation and response tools, testing and validation and managed defense.
This deal will help strengthen Google Cloud’s nearly $22 billion business as it competes with Microsoft and Amazon, as Google Cloud is losing money, per TechCrunch.
“Cyber security is a mission, and we believe it’s one of the most important of our generation,” Kevin Mandia, CEO, Mandiant, said in a statement. “Together, we will deliver our expertise and intelligence at scale via the Mandiant Advantage SaaS platform, as part of the Google Cloud security portfolio.”
The reverse triangular merger, announced March 8, is subject to customary closing conditions, including the approval of Mandiant shareholders and regulators. The deal is expected to close later this year. Google will likely face intense scrutiny over this deal with various antitrust litigation the Department of Justice has thrown at the company.
Mandiant’s legal advisor is Wilson Sonsini Goodrich & Rosati P.C. and its financial advisor is Goldman Sachs & Co. LLC. Google’s legal advisor is Freshfields Bruckhaus Deringer LLP.
Prior to the announcement, Google and Mandiant’s stock were valued at $2,529.29 and $22.49 on March 7, respectively. When it was announced on March 8, Google and Mandiant’s stock closed at $2,545.57 and $22.04 respectively. About a week later, Google’s stock closed at $2,534.82 on March 14 and Mandiant’s closed at $21.81.
This deal is Google’s second-largest to-date, only behind Google’s acquisition of Motorola Mobility for $12.5 billion, which closed in May 2012. The latest deal comes after Google Cloud acquired Siemplify, a security orchestration, automation and response (SOAR) provider for $500 million in January 2022. These acquisitions follow Google’s overall commitment to invest $10 billion to cybersecurity, which it announced in August 2021.