FireEye acquires Invotas; Who’s next?

Milpitas, Calif.-based FireEye made headlines last month when the large pure-play security products vendor and consultancy acquired iSight partners, based in Dallas, for $200 million in cash. The deal was announced on the same day that FireEye’s stock had plunged to a new low.

FireEye dispensed somewhere between 15 percent and 20 percent of its $1 billion plus cash on hand to take over iSight. It was just about one year ago when iSight raised a $30 million series C round to fuel its growth in the burgeoning cyber intelligence market.

During 2015, iSight expanded into Europe, acquired Idaho-based Critical Intelligence, and beefed up its board of directors with the addition of Andy Geisse, former CEO at AT&T Business Solutions. A FireEye press release states that with the acquisition, FireEye creates the world’s most advanced and comprehensive private cyber threat intelligence operation.

[ MORE ON THE BUY: FireEye acquires Invotas for faster incident response ]

Dave Dewalt, FireEye’s CEO, posted a blog yesterday announcing the company’s acquisition of Invotas, a security orchestration and automation provider. Invotas, with 19 employees, was spun off from CSG systems late in 2015. DeWalt calls the deal a “game-changer”.

Invotas’ technology will be integrated into the FireEye platform, enabling customers to purchase FireEye products and threat intelligence offerings with an orchestration and automation overlay. “Like our iSIGHT acquisition, the addition of Invotas positions FireEye to capitalize on a significant market opportunity,” said Michael Berry, FireEye chief financial officer. “The Invotas orchestration console will drive product pull-through by unifying FireEye detection and forensics technologies and threat intelligence offerings.”

FireEye appears ready for more acquisitions where they make sense. There’s a lot of startups plus small and emerging players in fast-growth markets including cloud security, mobile security, IoT security, and others.

A big question for FireEye is: Who’s next? FireEye has successfully executed its billion dollar plus acquisition of Mandiant, the consulting firm whom they acquired in January of 2014. The iSight acquisition suggests an appetite for mid-sized security companies with some real meat on the bone. And the Invotas deal is a sign that smaller firms and startups may be in FireEye’s crosshairs.

The bigger question for FireEye is when and how much will these acquisitions help lift their stock? FireEye was trading at a high of 54.23 on June 18, 2015. Today (at the time of this blog post) the stock is trading at 13.77.