(Bloomberg) — Google is in talks to acquire cybersecurity company Mandiant Inc. in what would be its second-biggest deal ever, according to a person familiar with the matter, after rival suitor Microsoft Corp. backed out of discussions.
Microsoft pulled out of talks more than a week ago, said two people with knowledge of the deliberations who asked not to be identified because the situation is private. The discussions with Google, first reported by the Information website, sent shares of Mandiant up 16% at the close of trading Monday.
Google and Microsoft are both looking to bolster their cybersecurity operations — an increasingly vital part of the companies’ cloud-computing businesses. With Mandiant, Google gets more tools to protect clients and respond to online threats. The business was founded almost two decades ago by Kevin Mandia, a former U.S. Air Force officer, and has gained a reputation for its incident response services.
Representatives for Microsoft and Google declined to comment. Mandiant didn’t immediately respond to a request for comment.
Microsoft ended its takeover discussions on concerns that Mandiant’s collection of security businesses wasn’t a good enough strategic fit, according to one of the people.
Mandiant’s stock climbed to $22.49 by the close on Monday, marking the biggest one-day gain since Feb. 8, when the Microsoft talks were reported. The shares have advanced 28% this year.
The stock gave up some of those gains in late trading after Bloomberg reported that Microsoft had pulled out of talks, a sign investors were anticipating a bidding war. The shares slipped as much as 6.1%.
Mandiant became a stand-alone company again last year when FireEye Inc. sold its security-product business for $1.2 billion to a consortium led by Symphony Technology Group. FireEye had acquired Mandiant in 2013. Following Monday’s rally, the takeover target has a market valuation of $5.26 billion.
At that level, a deal would dwarf every previous Google transaction — other than its 2012 acquisition of Motorola Mobility for about $12.5 billion.
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