Google agrees to buy Mandiant for $5.4B in all cash deal

Sean Gallup/Getty Images News

Google (NASDAQ:GOOGL) agreed to buy cybersecurity firm Mandiant Inc. (NASDAQ:MNDT) for $23/share in cash. Mandiant fell 4% in premarket trading after jumping 16% on Monday.

The price represents a 57% premium to the10-day trailing volume weighted average price as of Feb. 7, the last full trading day prior to market speculation about potential sale, according to a statement. The deal includes Mandiant's cash. Upon close of the transaction, Mandiant will join Google cloud.

The announcement confirms a story from Monday that Google was in talks to buy Mandiant. Google (GOOGL) was competing with Microsoft (NASDAQ:MSFT) for the cybersecurity firm, though it reportedly walked away from the deal.

The acquisition is expected to close later this year. Goldman Sachs is acting as exclusive financial advisor, and Wilson Sonsini Goodrich & Rosati P.C. is acting as legal advisor to Mandiant.

Mandiant's (MNDT) investor day was scheduled for Thursday.

Last year, FireEye was rebranded as Mandiant and now has a market value of $4.5B. The corporate name change came after the company announced in June it was selling its software business and FireEye name to a Symphony Technology Group-led consortium for $1.2B in cash.

Comments

[Stomp!]

That's what i wrote last friday,
i expected a confirmation early in the week.
Nice gain for those shareholders.

[gutcheck]

seems like a bargain

[RISHI_DB]

Just wondering and appreciate anyone could shed some lights to my doubts.

1. Since Google has fixed the price of the share $23/share, does that means the share wouldn't soar higher than that? Technically, yes but would love to listen more.

2. What would happen to this ticker once the acquisition is completed and does that means, those DM shareholder would be converted to Google share?

3. Do you think it is a good idea to keep this for long term or sell first?

[Kyel]

@RISHI_DB
1. I believe it would be quite difficult (but not impossible) for the stock to rise above $23 short term.
2. The deal is reported to be all-cash so the shareholders would be paid $23/share in cash, not in GOOG stocks
3. The acquisition may or may not go through. In the case that it fails, and if you bet on Mandiant's stock rising higher above $23 in the long term, hold. I guess it depends on your outlook on Mandiant's future.

[RISHI_DB]

@Kyel

Thanks man and appreciate your time to reply to my comment. Indeed, i could resonate to all your points. Initially, i was long in cybersecurity yet it seems this industries isn't making good money anymore and its better to merge with IT company that able to utilize it to the max level.

Periodically, not many companies with standalone expertise able to leverage in many ways.

[Shangrila Value]

@RISHI_DB Checkpoint doing great money.

[snowbrick]

Wonder what all the Mandiant haters will think now. The big tech cos understand the value.

[Shangrila Value]

What is the value of Mandiant to Google, compared to other alternatives?

[LongTermActivist]

Clearly shows that growth stocks are oversold

[kfordham281]

Google is amassing quite the security portfolio. VirusTotal, Siemplify, Mandiant, Project Zero (Threat Research).

[Y_P_K]

Why is it below 22 pre market?

[laramr1]

@Y_P_K if you own the stock it is basically going nowhere until the deal is done. Some will cash out now at a lower price so they can redeploy the funds.

[Y_P_K]

@laramr1 yes ok but usually "lower price" is much closer to closing price.

[Seriol]

@Y_P_K The spread represents the market's pricing in of the risk of deal failure, DOJ or China or EU veto. Also time, as money will sit until deal close.

[CrimsonPhoenix]

@SA Editor Joshua Fineman just an FYI ... GOGL is Golden Ocean Group Ltd and has nothing to do with GOOG or GOOGL :)

[SA Editor Joshua Fineman]

@CrimsonPhoenix Yeah was a typo. It will disappear from the ticker hopefully soon.

[LivefromDaGutter]

FTC stand up

[EverydayJoeSchmo]

FTC will block it. No deal. Short the stock.

[stephenmcmahon83]

@EverydayJoeSchmo I would argue that Google is now more powerful than the federal government. At this point, if Google went away overnight, the government would probably not be able to function.

[deadhead213]

$GOOGL smart move to expand its cyber security expansion.