FireEye Products & McAfee Enterprise Merge to Create $2B Entity

The combined company will have 5,000 employees, more than 40,000 customers, and nearly $2 billion in revenue, officials report.

Kelly Sheridan, Former Senior Editor, Dark Reading

September 30, 2021

4 Min Read
two puzzle pieces coming together
Source: Federico Caputo via Alamy Stock Photo

McAfee Enterprise and FireEye Products will merge into a single entity with nearly $2 billion in revenue following the close of Symphony Technology Group's acquisition of FireEye's product business, company officials report.

The combined organization will have more than 40,000 customers and 5,000 employees. At the helm will be CEO Bryan Palma, who joined FireEye as the executive vice president of FireEye Products in February 2021 and partnered with FireEye CEO Kevin Mandia to revamp its product strategy and close the STG sale for $1.2 billion. Palma will be joined by Ian Halifax, who recently joined McAfee Enterprise as chief financial officer and will be CFO of the combined entity.

McAfee sold its enterprise business to an STG-led consortium for $4 billion its March 2021. At the time, industry analysts weren't surprised but didn't think the deal would do much for McAfee's consumer or enterprise customers. The enterprise business, which had planned to operate as a standalone entity under STG, made up $1.3 billion of McAfee's $2.9 billion in 2020 revenue.

Months after McAfee's sale, FireEye announced plans to sell its products business to STG for $1.2 billion, with the remaining company renamed as Mandiant Solutions. The deal separated FireEye's network, email, endpoint, and cloud security products, along with its security management and orchestration platform, from the software and services under Mandiant, which has become more well-known for its work in threat intelligence and security expertise.

Those plans will go into effect on Oct. 4, when FireEye will change its corporate name and relaunch as Mandiant. The Nasdaq ticket symbol for the company's common stock will change to MNDT when trading opens on Oct. 5.

The transaction, FireEye said, would enable both parts of the business to "accelerate growth investments, pursue new go-to-market pathways, and focus innovation on their respective solutions." Security analysts predicted the sale of its products business would help drive growth for Mandiant but generate uncertainty for users of its network, email, endpoint, and cloud security tools.

Now, those tools will be combined with McAfee Enterprise in the fourth quarter of 2021 to create a new security portfolio to protect users across endpoints, infrastructure, applications, and cloud. The two companies have some overlap in their cloud security product offerings, and each has its own security information and event management (SIEM) platforms. It remains unclear how the combined product lineup will look, or be named, as the merger progresses.

Some industry experts saw this coming: Back in June, Omdia analysts predicted STG would merge McAfee Enterprise with FireEye, with the combined entity operating under the FireEye name. This has not been confirmed, though the McAfee brand is retained by the consumer-focused side of the company not controlled by STG, notes Omdia principal analyst Eric Parizo.

Still, he notes, it's a rare move.

"In a time when it's increasingly common to see large legacy cybersecurity companies break apart — most notably Symantec and, of course, McAfee itself — realizing a union between two of this century's most established cybersecurity brands is quite unusual," he says. The two share business objectives, technological synergies, even a corporate culture, and he adds that from an operational perspective, it will be easier to bring the two together than many may realize.

The new company faces "many difficult questions" going forward, Parizo continues. There is "potentially calamitous product overlap" in areas including endpoint, network security, and SIEM, and these will need to be quickly resolved. "But perhaps the biggest question is how two companies that were each independently sliding into industry irrelevancy can join forces to successfully reinvent themselves," he says.

This isn't to say the future is bleak for the combined organization. In most cases where private equity firms merge two acquisitions, the objective is often to cut costs and maximize value from the assets. STG is unusual, Parizo says, and its careful handling of the renovation at RSA Security indicates it realizes the value of its initial investment and the potential for long-term growth.

"If STG follows that same model here, then the new FireEye will indeed have a strong chance to reinvent itself as an enterprise cybersecurity industry leader for the next generation," he says.

FireEye declined to provide additional comment on the merger at this time. STG and McAfee did not respond to a request for comment.

"Our customers need an integrated security platform powered by artificial intelligence, machine learning, and automation," said new CEO Palma in a statement on the news. "We have an incredibly talented team of security professionals who will work tirelessly to deliver this outcome for our customers."

About the Author(s)

Kelly Sheridan

Former Senior Editor, Dark Reading

Kelly Sheridan was formerly a Staff Editor at Dark Reading, where she focused on cybersecurity news and analysis. She is a business technology journalist who previously reported for InformationWeek, where she covered Microsoft, and Insurance & Technology, where she covered financial services. Sheridan earned her BA in English at Villanova University. You can follow her on Twitter @kellymsheridan.

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