Google's (GOOG, GOOGL) purchase of Mandiant (NASDAQ:MNDT) for $5.4 billion is likely to be a "major ripple" in the cyber security space and result in more mergers, Wedbush Securities wrote in an investment note.
Analyst Dan Ives noted that Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) are likely to be "pressured into M&A" and continue to add to their cloud platforms, with Varonis (NASDAQ:VRNS), Tenable (NYSE:TEN), CyberArk (NASDAQ:CYBR), Qualys (NASDAQ:QLYS), Rapid7 (NASDAQ:RPD), SailPoint (NYSE:SAIL) and Ping (NYSE:PING) as potential acquisition candidates.
"In a massive growth backdrop for cyber security and further tailwinds seen during this Ukraine invasion from Russia bad actors/nation state attacks, we believe today's deal is the tip of the iceberg to a massive phase of consolidation potentially ahead for the cloud space," Ives wrote in a note to clients.
"In a nutshell this deal was a shot across the bow from Google to Microsoft and Amazon with this flagship cyber security acquisition of Mandiant."
On Tuesday, Google said it was buying cybersecurity firm Mandiant (MNDT) for $23 per share in cash, a 57% premium to the 10-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.
After the deal closes, Mandiant will become a part of Google's cloud unit.