FireEye Stock Soars 20% on Blackstone Investment, Respond Acquisition

FireEye Stock Soars 20% on Blackstone Investment, Respond Acquisition

The cybersecurity company’s stock price rocketed after hours, following a $400 million investment and an acquisition of Respond Software.

The cybersecurity company’s stock price rocketed after hours, following a $400 million investment and an acquisition of Respond Software.

Credit | FireEye

Cybersecurity company FireEye is up over 20%, as of now, after hours, following an announcement of a $400 million investment from a joint Blackstone Tactical Opportunities and ClearSky investment.

This investment is also being used to fund part of the company’s acquisition of Respond Software, another cybersecurity company.

Shares of FireEye (FEYE) were up 15-20% after hours, with shares of Blackstone up 1.44%.

Blackstone and ClearSky bought $400 million in newly designated 4.5% convertible preferred Series A shares, which can be converted into common stock at $18 per share.

CEO of FireEye, Kevin Mandia said “their investment validates our vision and provides financial, operational and leadership resources to accelerate our strategy.”

In addition to this investment, one of Blackstone’s directors, Viral Patel, Senior Managing Director, will serve on FireEye’s board of directors.

Alongside this investment news, FireEye’s acquisition of Respond Software is valued at $186 million, announced separately. This deal is in cash in stock, partially funded by Blackstone’s investment.

The company said Respond Software will open new opportunities for FireEye’s own products, especially their Mandiant platform, through Respond’s XDR engine.

XDR stands for “eXtended Detection and Response,” designed to “accelerate cyber investigation and response by automating the correlation of multi-sourced attack evidence using cloud-based data science models that ingest data from a comprehensive set of security technologies.”

In essence, this technology allows faster and more thorough response to a cybersecurity event, through correlating evidence incredibly quickly. XDR accomplishes this through the cloud, alongside with other software that take in data from security technologies.

Respond’s XDR allows faster response times and better overall security outcomes. CEO Mandia explained, “with Mandiant’s position on the front lines, we know what to look for in an attack, and Respond’s cloud-based machine learning productizes our expertise to deliver faster outcomes and protect more customers; This creates a learning system with new capabilities that will enable us to expand our Mandiant portfolio and drive new XDR revenue through our Mandiant Advantage platform.”

This purchase marks FireEye’s second acquisition this year, following their January purchase of Cloudvisory.

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Even with these boosting factors for FireEye, recently the company has been struggling.

Since 2013, the stock is down around 70-80%, done 14% this year alone. Hopefully this acquisition will help boost the company and create some opportunities to help it fully flush out its issues, especially with the $400 million investment jump.

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