FireEye is selling its core cybersecurity products to a group led by private equity firm Symphony Technology Group (STG) in order to focus on its Mandiant threat response and services business.
The rebranded Mandiant Solutions will focus on high-growth services areas like Automated Defense, CEO Kevin Mandia said in a blog post. The products and services businesses will continue to collaborate on threat intelligence, product telemetry and sales, perhaps alleviating any customer concerns about continuity between the two groups.
Mandia will become CEO of Mandiant, the company he founded in 2004 and sold to FireEye in late 2013. FireEye Products EVP Bryan Palma will take the helm of the new products company.
FireEye and Mandiant have seen their reputation climb in recent months with rapid detection of the SolarWinds hack, among other high-profile cyber attacks.
Wall Street investors had a lukewarm response to the news, sending FEYE shares 15% lower in midday trading Thursday. Products accounted for $795 million of the company’s $941 million in revenue in 2020. Product sales rose 2% last year, while the services business grew 19% to $216 million. Gartner expects worldwide information security and risk management spending to grow 12% this year to $150 billion, with services making up almost half the market.
STG, meanwhile, already owns RSA and other security properties and will soon add McAfee’s enterprise business, creating potential synergies among the cybersecurity products businesses.
The deal is expected to be completed in the fourth quarter, giving Mandiant a significant chunk of cash to grow its services business.