Mandiant Inc. closed Monday on its sale to Google LLC, a subsidiary of West Coast powerhouse Alphabet Inc. (NASDAQ: GOOGL), ending yet another chapter in the 18-year-old Reston cybersecurity company's history.
The all-cash deal, valued at $23 per share for a total of $5.4 billion, will boost Google’s cybersecurity capacities as it competes with other major cloud players such as Amazon.com Inc. (NASDAQ: AMZN) and Microsoft Corp. (NYSE: MSFT). Mandiant shareholders had OK'd the combination in June, while the Justice Department had signed off on it in July.
Mandiant, whose share price stopped trading Monday on the Nasdaq exchange, will continue to operate as an independent brand. "While we are now part of Google Cloud, Mandiant is not going away," CEO Kevin Mandia wrote Monday in a company blog post. "In fact, it’s getting stronger."
Mandia will remain an executive officer and director of Mandiant, along with new directors Will Grannis and Svilen Karaivanov, according to a Securities and Exchange Commission filing Monday. Several of Mandiant's other former directors, including Kimberly Alexy, Sara Andrews, Arthur Coviello, Adrian McDermott, Viral Patel, Enrique Salem and Robert E. Switz, have stepped down after the companies combined, as have former President and Chief Operating Officer John Watters, Chief Financial Officer Frank Verdecanna, Chief Revenue Officer William Robbins, Chief Accounting Officer James Medina and Peter Bailey, executive vice president of Mandiant Solutions.
It’s unclear if there will be staff layoffs related to the transaction. None have been announced, and a company spokesperson previously referred the Washington Business Journal's questions about local staff and real estate to the public filings and disclosures.
Mandiant’s software-as-a-service product assists customers in detecting and preventing cyberattacks, a growing problem for agencies, financial firms and others. The company had sold previously to FireEye in 2013, shifting its home base to the opposite coast until last year, when it decided to divest its products business in a $1.2 billion deal, relocate to the D.C. region and rebrand itself as Mandiant once again.
As of the company’s most recent proxy statement, Mandia remained the largest shareholder among its executives and board directors.
Mandia, who founded the original company in 2004, holds 3.07 million shares, both directly and indirectly through trusts and family members, according to SEC filings. On top of that, Mandia will receive up to 312,157 restricted stock units and 315,999 performance share units through the date of the merger’s closing. Thus, his total stock value on paper is $85.1 million under this deal with Google.
Watters, who joined in April 2021, has a total stock value of $14.5 million under this deal, while Robbins' total stock value is worth $10.6 million and Verdecanna's total stock value is worth $16.2 million under the deal.
The executive team was slated to receive hefty payouts if they departed as a result of the local company's change in control. Including continued salary, health care premiums, cash incentives and stock awards, Robbins was eligible to receive $11.3 million, Watters would walk away with $16.4 million and Verdecanna would receive $9.1 million, according to the company’s latest proxy statement, which lists the change of control agreements as of Dec. 31 of last year. If Mandia were to depart during a certain period due to the sale's closure, he would receive $18.2 million in severance payouts.
Mandiant’s revenue in the second quarter was $137.9 million, a 21% hike from $113.9 million during the same period a year ago. Its net loss was $90.5 million in the most recent quarter, nearly 40% wider from its $64.7 million loss in the second quarter of 2021. In February — before the deal with Google had been reached — Watters said the company was positioned for profitability in 2023.
In August, Mandia joined the board of College Park IT and cybersecurity training company Cybrary.
