FireEye ( FEYE Quick Quote FEYE - Free Report) announced that it has closed the capital-investment deal with a group led by Blackstone. The deal was announced on Nov 19, wherein investment firms — Blackstone and ClearSky — had agreed to make a $400-million capital infusion through buying convertible preferred stocks of the cybersecurity solution provider.
Per the terms of the deal, Blackstone and ClearSky have purchased 400,000 shares of a newly-designated 4.5% Series A Convertible Preferred Stock of FireEye, with a purchase price of $1,000 per share. FireEye noted that the conversion rate of the preferred stocks has been revised downward to $17.25 per share from the earlier agreement of $18.
FireEye had previously said that it will use the net proceed from this offering to fund the Respond Software acquisition deal. Notably, on Nov 19, it agreed to buy Respond Software, a cybersecurity investigation automation company, in a cash-stock deal worth $186 million.
Additionally, FireEye intends to use the proceeds from investments to support strategic its growth initiatives, and invest in cloud platform and managed services portfolio.
Remote Working Trend Driving Cybersecurity Demand
Remarkably, cybersecurity solutions and cloud services are gaining traction in order to facilitate the smooth running of business operations amid the remote-working wave due to the COVID-19 pandemic.
Markedly, the company’s professional services revenues climbed 18.5% year over year and its product, subscription and support revenues increased 2.2%, in the recently-concluded quarter.
Moreover, strong adoption of FireEye’s Mandiant Solutions and the recent investment along with a robust product portfolio are anticipated to drive the company’s growth.
Red Team Cyberattack May Dent FireEye’s Image
Last week’s cybersecurity theft at FireEye might affect its business in the days to come. In a Dec 8 blog posted by the company, FireEye CEO Kevin Mandia disclosed that attackers have stolen the “Red Team” tools used by its officials for testing customer security.
The latest data breach has put FireEye’s reputation at risk. This can impact its business in the upcoming period as customers might be apprehensive in buying its solutions which couldn’t safeguard the company from hackers.
SolarWinds ( SWI Quick Quote SWI - Free Report) has become the first corporate victim of the data breach at FireEye. On Dec 13, the firm said that its Orion network monitoring products rolled out in March and June have become victim to a highly sophisticated, manual supply-chain attack.
FireEye noted that it is working closely with the Federal Bureau of Investigation and some of its partners, including
Microsoft Corporation ( MSFT Quick Quote MSFT - Free Report) , are conducting an in-depth investigation on the breach.
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