martinwolf Transaction Analysis

*Financial Information

• Transaction Details Not Disclosed. 
• EV/2019 Billings: 12.5x
• EV/2020 Billings: 3.6x

Transaction Facts

• FireEye, Inc. (NASDAQ: FEYE), a Milpitas, California-based cybersecurity company announced today that it will acquire security instrumentation company Verodin for $250 million.
• The acquisition of Verodin will add new capabilities to the FireEye portfolio by identifying gaps due to equipment misconfiguration, changes in the IT environment, and evolving attacker tactics. It will integrate with the FireEye Helix security orchestration.
• FireEye shares were flat after hours.  

martinwolf Analysis

• • Past of Strong Partners and Profitability: FireEye has a strong history of dedication to the channel and building strong channel partnerships, with over 1,500 worldwide channel partners. In February 2019, CRN awarded two top executives, Chris Carter and Krisit Houssiere, as 2019 Channel Chiefs. This award comes from demonstrated leadership and commitment to channel partner programs that drive future growth and innovation. FireEye’s partner revenues saw an increase of 15 percent in 2018 alone. Among the impressive partnerships FireEye has developed, its recent announcement that it has been named a key partner in the United States Army Cyber Command efforts is an impressive land for the company – part of a $905 million, five-year award.

Innovative with Acquisitions: Since 2014, FireEye Inc. has made big-name acquisitions of IT, cybersecurity and software companies. Its biggest deal (where financials were released) to date was in 2013, when it acquired Mandiant for $1 billion in cash and stock. Mandiant’s founder became FireEye’s COO at the time and went on to become the company’s CEO. As CEO, Mandiant has led continuous strategic acquisitions that have helped bolster FireEye’s footprint as a cybersecurity leader, with acquisitions like X15 Software last January. Strong leadership and acquisitions have helped FireEye meet and exceed quarterly financial results.

Value from Verodin: The acquisition of Verodin brings huge value-add factors for FireEye – it has accelerating sales growth, with 100 percent YoY growth, over 90 employees, and a channel-centric sales model, according to FireEye. Not only is Verodin rapidly growing with an attractive business model, its service offerings will help bolster FireEye’s growth and adaptability. Verodin performs repeatable tests of security controls against real-world attacks and ensures that security controls are delivering the expected business outcomes. Its proactive business model will allow FireEye to consistently leverage and adapt its service offerings.

For more information about this transaction, click here to read the press release.

*According to the press release, Verodin will add more than $20 million to 2019 billings and more than $70 million to 2020 billings.

martinwolf was not the advisor in this transaction.