FireEye Mulls Sale To Private Equity Firm, Hires Goldman Sachs: Report

Private equity firms are believed to be the most likely buyer of FireEye after the cybersecurity vendor failed to attract the interest of strategic buyers in an earlier process, sources tell Business Insider.


FireEye has hired Goldman Sachs to advise the publicly-traded cybersecurity vendor on a potential sale, according to Business Insider.

Private equity firms are believed to be the most likely buyer of the Milpitas, Calif.-based platform security company after FireEye failed to attract the interest of strategic buyers in an earlier process, three sources familiar with the discussions told Business Insider. The talks are in early stages, and there's no certainty that a deal will be reached, sources told Business Insider.

FireEye's stock is up $0.63 (4.77 percent) to $13.85 per share since the Business Insider report came out Wednesday afternoon - the highest the stock has traded since Sept. 23.

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Goldman Sachs didn't immediately respond to a request for comment, while FireEye told CRN that it doesn't comment on rumors or speculation.

[Related: FireEye Restructures To Drive Growth Around Vendor-Agnostic Services]

This is not the first time FireEye has been rumored to be on the selling block. Bloomberg reported in June 2016 that FireEye had hired Morgan Stanley to explore a sale, but ultimately ended up rejecting at least two takeover offers - including one from Symantec - that were below expectations.

FireEye has consistently struggled with turning a profit since going public in 2013. The company recorded a net loss of $67.3 million, or $0.33 per diluted share, in its most recent fiscal quarter, which ended June 30.

Similarly, FireEye's stock has been stuck trading at under $20 per share almost consistently since the start of 2016. That's a far cry from FireEye's all-time trading high of more than $85 per share in February 2014, five months after the company first went public. Bloomberg said in its 2016 story that FireEye had been looking for sale offers of at least $30 per share.

FireEye currently has a market cap of $2.97 billion, well below that of current Wall Street cybersecurity darlings CrowdStrike and Okta, both of which have gone public in the last two years and today each have market caps in excess of $12 billion.

The company in late July announced a restructuring that would bring its vendor-agnostic Mandiant professional services, threat intelligence, managed defense, and Helix and Verodin platforms together into a single organization.

Similarly, FireEye said in July that it would consolidate and streamline its product management, engineering, and customer success teams for the company's network security, endpoint security, email security and SIEM (security information and event management) product. The single team for FireEye's spoke products is being led by Chief Technology Officer Grady Summers.

Having a unified group around its faster-growing platform tools will allow FireEye to better overlay its intelligence and decouple its detection capabilities from its spoke products, CEO Kevin Mandia told investors in July.

While FireEye's spoke products compete against other endpoint security, firewall, cloud security, and email security offerings, Mandia said the company's platform group will operate independently of the spokes and not favor FireEye products over anyone else in its analysis. The new structure will better align FireEye's platform group will how the company actually goes to market, Mandia said at the time.