FireEye acquires Mandiant, creating formidable computer security superpower

New York TimesJanuary 2, 2014 

In a deal that may have broad repercussions for companies and governments fending off sophisticated hackers and state-sponsored digital attacks, FireEye, a provider of security software, has acquired Mandiant, a company known for emergency responses to computer network breaches.

The deal, in both cash and stock, is worth more than $1 billion, based on the current value of shares in FireEye.

The acquisition, which closed Monday but was not publicly announced until after the markets closed Thursday, was the biggest security deal of 2013. It merges two darlings in the $67 billion global computer security market that together could form a formidable competitor to antivirus giants like Symantec and Intel’s McAfee.

David G. DeWalt, FireEye’s chairman and chief executive, ran McAfee before it was sold to Intel in 2010. DeWalt was rumored to be a contender for the top job at Intel, but surprised company insiders when he left to join FireEye in 2012.

Mandiant is best known for sending in emergency teams to root out attackers who have implanted software into corporate computer systems. Much of its work focused on attacks from China.

The combination of the two companies – one that detects attacks in a novel way, another that responds to attacks – comes at a moment when corporate America is increasingly wary of relying on the federal government to monitor the Internet and warn of incoming attacks.

That wariness has increased since the revelations of Edward Snowden, the former National Security Agency contractor who removed thousands of documents before he took temporary refuge in Moscow.

“After the Snowden events, in the current political climate no one can say to the government, ‘Please, come on in and monitor our networks,’ ” said Kevin Mandia, the founder of Mandiant, who is becoming chief operating officer of the combined company.

FireEye’s success has depended on a technology for detecting attacks that works quite differently from most antivirus products. FireEye’s software isolates incoming traffic in virtual containers and looks for suspicious activity in a sort of virtual petri dish before deciding whether to let the traffic through.

Mandiant was frequently called in after FireEye found malware. In those cases, it used its own threat detection technology to determine where the attack was coming from and to design countermeasures.

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