Wall Street Issues Lukewarm Reaction To FireEye Plans To Become Mandiant

Shares of FireEye (FEYE) are under pressure on Thursday after the cybersecurity company said it was selling its products business, including the FireEye name, to a consortium led by Symphony Technology Group. The transaction will split Mandiant Solutions, its cyber forensics unit, from the company's cloud security, network, and email products. Commenting on the news, Morgan Stanley analyst Hamza Fodderwala said that while the break-up makes sense, the upside for the stock following the deal is "less clear." Voicing a similar opinion, Baird analyst Jonathan Ruykhaver told investors that he long believed that FireEye could unlock value by splitting off the legacy business, but sees the move as reducing near-term visibility into the financial models and adding execution risk.

$1.2B SALE: FireEye announced it has entered into a definitive agreement to sell the FireEye Products business, including the FireEye name, to a consortium led by Symphony Technology Group in an all-cash transaction for $1.2B, before taxes and transaction-related expenses. The transaction is expected to close by the end of the fourth quarter of 2021, subject to customary regulatory approvals and closing conditions, and will separate FireEye's network, email, endpoint, and cloud security products, along with the related security management and orchestration platform, from Mandiant's controls-agnostic software and services, enabling both organizations to accelerate growth investments, pursue new go-to-market pathways, and focus innovation on their respective solutions. The FireEye Products business and Mandiant Solutions will continue to operate as a single entity until the transaction closes, allowing management and STG to develop a successful transition of the FireEye Products business to a standalone entity within the STG portfolio.

“We believe this separation will unlock our high-growth Mandiant Solutions business and allow both organizations to better serve customers. After closing, we will be able to concentrate exclusively on scaling our intelligence and frontline expertise through the Mandiant Advantage platform, while the FireEye Products business will be able to prioritize investment on its cloud-first security product portfolio. STG’s focus on fueling innovative market leaders in software and cybersecurity makes them an ideal partner for FireEye Products. We look forward to our relationship and collaboration on threat intelligence and expertise,” said FireEye Chief Executive Officer Kevin Mandia. 

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