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January 21, 2016updated 31 Aug 2016 9:50am

FireEye purchases threat intelligence firm iSIGHT for $200m

News: Major purchase confirms consolidation in cyber security market.

By Charlotte Henry

FireEye has made a major acquisition in the cyber security market, purchasing the threat intelligence firm iSIGHT Partners.

The transaction was completed on the 14th of January 2016, and announced six days later. The deal is worth $200 million in cash, with FireEye purchasing 100% of the outstanding iSIGHT shares.

Former iSIGHT shareholders will also have the opportunity to earn an additional $75m in cash and equity if it achieves a threat intelligence bookings target by the end of FireEye’s second quarter of 2018.

"This acquisition extends FireEye’s intelligence lead with an offering no one else in the industry can match," said David DeWalt, FireEye CEO and chairman.

Customers already using iSIGHT products will continue to have access to them, and FireEye says it will add a new intelligence subscription model to its offering aimed at specific verticals, as it planning to offer with Visa. It says that b existing and new customers will be able to purchase new threat intelligence products that will be tailored to their organisation’s specific threat profile.

FireEye believes that cyber security in an intelligence led era, with Nation State offerings becoming an ever growing concern.

"As the cyber operations become integrated with physical, geopolitical and competitive conflict, an intelligence-led approach to security will be key in detecting the most sophisticated threats and responding to them quickly and effectively," DeWalt said.

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iSIGHT Partners has a strong EMEA presence – it is headquartered in the Netherlands, and also has staff in the UK.

The firm’s chief executive John Watters said "Until now, only governments and large enterprises have been able to achieve intelligence-led security, but with the combined resources of FireEye, Mandiant and iSIGHT, we can make the benefits of intelligence-led security available to a broad range of organizations."

It is understood that all iSIGHT staff will be remain, with no layoffs planned on the back of the deal.

A source close to FireEye declined to comment on whether or not the firm would be in the market for more acquisitions. Just over two years ago, on January 2nd 2014, the security software provider announced the acquisition of services firm Mandiant for $1bn.

This current move underlines the consolidation that is currently going on in the cyber security market, according to Panmure Gordon analyst

George O’Connor. "We are already seeing consolidation – see Sophos constantly buying stuff and current market chatter has CheckPoint buying CyberArk," he said.

On the transaction specifically, O’Connor said that Fireeye "was a stock market darling that has been pummelled" and so "buying stronger IP is a good move to restore shareholder confidence."

FireEye recently announced a partnership with F5 Networks, whose Techincal Account Manager Paul Dignan said: "Having greater knowledge of the environment is the key to preventing multi-faceted threats – something that iSIGHT Partners will bring to FireEye. The more security experts that can come together to increase cyber threat intelligence, the more chance we have of lowering risk and threats for global enterprises."

FireEye yesterday also announced its preliminary financial results for the fourth quarter of 2015. It had said total revenue for the final three months of 2015 was between $184m and $185m, and expects total fourth quarter billings to be between $256m to $2570m. It also had operating cash flow of between $7 to $9, giving operating cash flow of between $45m and $37m for the full year 2015. It will announce its final results after US market close on February 11th 2016.

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