Cybersecurity stocks have, at times, been resilient in the current market as most stocks see a heavy sell-off amid Russia’s invasion of Ukraine.
Google announced on Tuesday that it plans to buy cyber security firm Mandient for about $5.4 billion as part of an effort to better protect its cloud customers.
The Mountain View search giant said it would pay $23 a share for the publicly traded firm, which was founded in 2004.
If the deal goes through, Mandiant will join Google's cloud computing division, which has not yet grown to the same size as Microsoft Azure or Amazon Web Services.
Google Cloud CEO Thomas Kurian said in a statement, "Organizations around the world are facing unprecedented cybersecurity challenges as the sheer magnitude and severity of attacks previously used to target major governments is now being exploited in every industry." Companies are being targeted."
He added: “We look forward to welcoming Mandient to Google Cloud to further enhance our security operations suite and advisory services, and to help customers address their most critical security challenges.”
The deal is expected to close at the end of this year.
Shares of Mandient closed up 16 percent on Monday after The Information reported that Google is interested in acquiring the company.
Mandiant, which has a market value of about $5.25 billion, was previously under the FireEye umbrella before that brand was sold. FireEye was credited with helping Microsoft discover the SolarWinds hack, which attacked government systems last year.
Wedbush analyst Dan Ives said in a note to investors on Tuesday: “Cyber attacks are increasing by the day and with Russia/state sponsored cyberterrorism organizations going on a cyber war, Google is at the right time to increase its cyber security footprint with Mandient. and is looking to differentiate itself from the likes of Microsoft and Amazon in the cloud arms race.
Ives said his firm expects the deal to have a "major ripple effect" in the cybersecurity sector.
"Cloud giants Amazon and Microsoft will now be pressured into M&A and further expand their cloud platforms," he said.
“We believe that cyber names (among a handful of private players) such as Varonis, Tenable, CyberArk, Qualys, Rapid7, Sailpoint and Ping standouts as potential M&A candidates in cyber security to help these vendors move from cyber to the next generation. Gives laser focus on protecting cloud workloads from attacks."
Cyber security stocks, at times, have been resilient in the current market as most stocks have seen heavy selling amid Russia's invasion of Ukraine.