Cybersecurity solutions company hits up Goldman Sachs for help
Cybersecurity company FireEye, which has struggled financially since going public in 2013 and has undergone a challenging transition from a hardware vendor to a Software-as-a-Service (SaaS) provider, reportedly is looking for a buyer.
The Lowdown: Unnamed sources told Business Insider that the Milpitas, California-based company has approached Goldman Sachs to advise it on a potential sale, with private equity firms said to be the most likely buyers.
The Details: The report noted that the process is in the early stages and that a deal may not be reached, but interest by FireEye came after failed earlier attempts to attract strategic buyers.
Talk of a potential sale comes just over two months after the company announced a restructuring plan that focused on streamlining its business operations. One step was consolidating its network, endpoint, e-mail, and security information and event management (SIEM) products, as well as product management, engineering, and customer-facing units, into a single products group, CEO Kevin Mandia said in July.
The company also created a platform and solutions group that now comprises platform engineering, Verodin security instrumentation technology, managed defense, threat intelligence, and vendor-agnostic Mandiant professional services.
The Impact: The company has good technology but not as broad or deep a portfolio as other vendors in a highly competitive security software market. Earlier this year, it spent $250 million to buy Verodin, whose platform finds holes in a company’s security due to such issues as misconfiguration and network changes.
Background: FireEye was founded in 2004, but since going public nine years later, its stock price has dropped and in recent years has spent most of the time under $20. Since the report about a possible sale surfaced, the stock price has climbed about 5%, to almost $14.
The Buzz: “Our platform strategy is simple: To provide a single platform that allows the customer to leverage all of its security technologies from any vendor and overlay our intelligence and expertise to simplify and automate security tests, while continuously testing and improving security controls,” Mandia told analysts in July when discussing FireEye’s most recent restructuring. “Adoption of a platform results in more effective and efficient security programs backstopped by Mandiant expertise on demand with measurable effectiveness delivered from the Verodin platform in the world’s best threat intelligence. … In order to be as efficient as possible, we’re aligning our internal structure at FireEye to reflect our evolution from a network security product vendor to a comprehensive security platform company.”