Google said it reached a deal to buy cybersecurity company Mandiant Inc. for nearly $5.4 billion, aiming to bolster its cloud unit with more cybersecurity offerings at time when businesses across industries have seen a wave of attacks on their systems.
Google, a unit of Alphabet Inc., said the deal will allow its cloud unit to offer an end-to-end security operation to customers.
Once the deal closes, Mandiant will become part of the Google Cloud unit, which is rapidly growing but remains smaller than its key rivals. In the most recent quarter, the business saw revenue rise by about 45% to $5.54 billion, or about 7% of the company’s total quarterly revenue.
Mandiant was a pioneer in the cybersecurity industry in publishing detailed reports about malicious cyber campaigns and identifying the likely nation-state sponsor of the intrusions, and U.S. intelligence agencies have come to rely on the insights provided by Mandiant and other companies that shed light on the motives and tactics of hackers in Russia, China, Iran and elsewhere.
Cybersecurity investments have been hot among tech companies, as they try to offer those services to customers. Microsoft had reportedly also expressed interest in a takeover of Mandiant last month.
Google agreed to pay $23 in cash for each outstanding share of Mandiant, which represents a 2.3% premium over Monday’s closing price of $22.49 for Mandiant.
The deal price is a nearly 53% premium over the Reston, Va., company’s closing price of $15.06 on Feb. 7, before published reports emerged that Microsoft was circling Mandiant.
For Google, the deal marks one of its biggest bets yet, only smaller than its purchase of Motorola Mobility for $12.5 billion.
The companies said the deal is expected to close later this year. Google has faced intense regulatory scrutiny for smaller acquisitions. It took more than a year for Google to close its $2.1 billion acquisition of Fitbit LLC as regulators took a close look at the deal.