Google to acquire cybersecurity firm Mandiant for $5.4 billion

Google is to purchase cybersecurity firm Mandiant for $5.4 billion, hoping to boost its cloud security solutions as companies are facing a flood of cyberattacks on their systems.

The Mandiant deal is Google's second-largest transaction ever, behind its $12.5 billion purchase of Motorola a decade ago.

The all-cash transaction would see Google pay Mandiant $23 per share, representing a premium of about 53 per cent above where Mandiant's stock level sat before the first potential buyer - Microsoft - expressed interest in a deal.

The acquisition is subject to the usual closing conditions, including approvals from stockholders and regulators, and is expected to close later this year barring any roadblocks.

After the transaction closes, Mandiant will become a part of Google Cloud.

"Organisations around the world are facing unprecedented cybersecurity challenges as the sophistication and severity of attacks that were previously used to target major governments are now being used to target companies in every industry," said Google Cloud CEO Thomas Kurian.

"We look forward to welcoming Mandiant to Google Cloud to further enhance our security operations suite and advisory services, and help customers address their most important security challenges."

The acquisition will enhance Google Cloud's existing security capabilities. The unit makes more than $19 billion in revenue every year, although remains smaller than its key competitors, losing billions each year.

In the most recent quarter, Google Cloud sales increased by almost 45 per cent to $5.5 billion, or roughly seven per cent of the firm's total quarterly revenue.

Google says the acquisition will enable its cloud unit to enhance its offerings and provide clients with a complete security operations suite, which can be used in both cloud and on-premise settings.

Mandiant employs more than 600 security consultants and 300 intelligence analysts. The company is perhaps best known for exposing the massive SolarWinds hack — an operation alleged to be sponsored by the Russian government, which infiltrated systems throughout the US federal government.

In recent years, it has become more common for criminal ransomware gangs and nation-state hackers to operate from cloud-hosted infrastructure. Mandiant and other cyber security firms are helping US intelligence services understand the motivations and techniques of hackers operating from Russia, China, Iran, and others.

Mandiant became a standalone entity again in 2021 after FireEye, which purchased the company in 2013, sold its products business and the FireEye name to a consortium headed by private-equity firm Symphony Technology Group, for $1.2 billion.

Kevin Mandia, Mandiant's CEO, said he was attracted to Google as a buyer because of the company's aim to better automate cybersecurity, as well as the need to defend cloud environments from hackers.

"I don't look at this as selling my baby. I look at it as moving the mission forward," Mr. Mandia said.