Google (ticker: GOOGL) finally reached a deal to acquire Mandiant (ticker: MNDT) for $23 a share in cash. The cybersecurity software and services company will be acquired with a valuation of $5.4 billion, inclusive of Mandiant’s net cash.
Mandiant shares dropped 3.4% to $21.73 on Tuesday. The stock closed Monday’s trading session with a gain of 16% after it was reported that the deal was in the bag. The deal is expected to close later on this year, with the cybersecurity software company joining the Google cloud afterwards.
“Today, organizations that are facing cybersecurity challenges that have accelerated in frequency, severity and diversity, creating a global security imperative,” said Google in a statement. This deal does come as a surprise, especially since Bloomberg had reported that Mandiant was in talks with Microsoft (ticker: MSFT).
“With cyber-attacks increasing day by day and cyber warfare underway from Russia/ state-sponsored cyber-terrorism organizations, Google is presently doubling down on its cyber security footprint at just the right time with Mandiant and is looking to differentiate itself further from the likes of behemoths Microsoft and Amazon in the clouds arms race,” wrote Dan Ives, an analyst at Wedbush.
Ives expects Amazon.com (ticker: AMZN) and Microsoft “will now be pressured into M&A” and further bulk up their cloud platforms.