FireEye Acquires Respond Software, Gets $400 Million Investment Led by Blackstone

FireEye on Thursday announced a $400 million strategic investment led by investment giant Blackstone, which the company says will be used to support growth initiatives, including the acquisition of Respond Software, also announced on Thursday.

FireEye said it paid roughly $186 million in a combination of cash and stock to acquire Respond in a transaction that closed on November 18, 2020.

Shares of FireEye (NASDAQ: FEYE) surged in after-hours trading to more than $16.62 per share, after closing at $14.24 in regular trading hours Thursday.

Founded by Mike Armistead, Robert Hipps and Chris Calvert, Mountain View, Calif.-based Respond Software emerged from stealth mode in August 2017 with software designed to automate the role of security analysts and make security operations centers (SOCs) more efficient. The company had raised more than $32 million in funding, including a $20 million Series B round in May 2019.

Respond Software’s extended detection and response (XDR) engine will be integrated into the Mandiant Advantage platform, FireEye said.

Under the terms of its investment, Blackstone and co-investor ClearSky will purchase $400 million in shares of a newly designated 4.5% Series A Convertible Preferred Stock of FireEye with a purchase price of $1,000 per share, that will be convertible into shares of FireEye’s common stock at a conversion price of $18.00 per share.  

FireEye will appoint Viral Patel, Senior Managing Director at Blackstone, to its Board of Directors upon the closing of the transaction. 

Earlier this week, FireEye delivered its cyber landscape predictions for the coming year, including growing and affiliate-supported espionage, increased targeting of OT by ransomware, and continued targeting of healthcare.