Alphabet Is Acquiring Madiant For $5.4 Billion, Here’s Why

On Tuesday, Google announced its acquisition of cybersecurity firm Mandiant for $5.4 billion. The tech giant said the acquisition was being embarked upon as a way of protecting its cloud customers. Although the deal is subject to regulatory approval, Google announced that it will pay $23 per share for the over a decade old company.

When the deal pulls through, it will be the company’s second-biggest acquisition after its acquisition of Motorola Mobility for $12.5 billion in 2012. Google plans to include Mandiant under its Cloud Computing Division which is still smaller in terms of growth compared to Amazon Web Services and Azure.

Thomas Kurian, CEO of Google Cloud in a statement said that “Organizations around the world are facing unprecedented cybersecurity challenges as the sophistication and severity of attacks that were previously used to target major governments are now being used to target companies in every industry. We look forward to welcoming Mandiant to Google Cloud to further enhance our security operations suite and advisory services, and help customers address their most important security challenges.”

The Google-Mandiant acquisition is expected to pull through before the close of the year.

Alphabet’s Chief Financial Officer Ruth Porat shed more light on why the company is acquiring Mandiant. She said that “It’s an extraordinary player in cybersecurity. It is going to enable us to provide this end-to-end solution in this very important area and, again, it goes to our commitment around cybersecurity but also all we’re doing in the cloud. The investments and the focus — it starts with let’s make sure we have the depth and breadth within industry verticals so that we can address the idiosyncratic needs within each industry, whether it’s finance versus retail versus health care.”

She went ahead to emphasize how Mandiant’s acquisition could help the company compete with rivals such as Azure and Amazon Web Services. “The way we look at it (investments) is we’re obviously not competing with our peers at the scale they were then, we are competing at the scale they are now in a market that is accelerating. We of course remain focused on what is that longer-term path to profitability, but to be really clear, in the near term, we’re continuing to invest across the board to support cloud,” she explained.

Mandiant is already quite a big name in the cloud space. Leading US government agencies are some of the firm’s customers. Mandiant could be Google’s way of coming to the forefront of the cloud business.