FireEye shares soar on Mandiant deal

FireEye Inc. shares soared Friday on its acquisition of noted cybersecurity company Mandiant Corp.

The computer security software company announced the cash-and-stock deal, valued at about $1 billion, late Thursday. FireEye's shares were up nearly 37 percent by late afternoon Friday.

Mandiant, based in Virginia, is well known for linking years of cyberattacks against U.S. companies to a secret Chinese military unit. The company issued a detailed report last February tracing attacks on 141 companies to a hacking unit in Shanghai that experts believe is part of the Chinese Army's cyber command. The Chinese government denied the firm's accusations, but the incident helped the company burnish a reputation in cybersecurity.

FireEye, based in Milpitas, Calif., said that the purchase of privately held Mandiant would increase its ability to stop attacks in their early stages. The company also raised its fourth-quarter revenue forecast to above market forecasts.

Wedbush analyst Sanjit Singh said that the acquisition will make FireEye a "must have" vendor in the market as Mandiant's strengths address some perceived threat-detection weaknesses at FireEye. The analyst also said in a research note that there is limited overlap in their customer base, benefiting both brands. Singh maintained a "Neutral" rating and a $42 price target on FireEye's stock.

Shares of FireEye added $15.16 to reach $56.29 by late afternoon. They hit $56.44 earlier in the day, an all-time trading high.

FireEye went public in September with its shares priced at $20.