FireEye Closes $400 Million Blackstone Investment Days After Cybersecurity Breach

FireEye has closed on a $400 million investment by Blackstone, barely a week after one of the world’s top cybersecurity firms disclosed that its own files were hacked by what federal authorities suspect was a foreign intelligence service.

The investment will be managed by Blackstone Tactical Opportunities, with ClearSky, an investment firm with a focus on cybersecurity, as a co-investor, FireEye said in a press release.

In addition, Viral Patel, a senior managing director of Blackstone, and Art Coviello, former CEO of RSA Security, will join the firm’s board of directors, FireEye said.

FireEye first announced the deal in November, along with its acquisition of Respond Software, a startup that helps companies probe and get a handle on security incidents.

Under the terms of the deal, Blackstone and ClearSky bought “400,000 shares of FireEye’s newly designated 4.5 percent Series A Convertible Preferred Stock (the “Series A Preferred”), with a purchase price of $1,000 per share, for $400 million in the aggregate,” FireEye noted in a press release.

“The Series A Preferred will be convertible into shares of FireEye’s common stock at a conversion price of $17.25 per share, subject to certain customary adjustments,” the company added.

Blackstone and ClearSky’s investment in FireEye comes as the renowned cybersecurity firm scrambles to rebound after reports broke last week that its systems had been hacked.

The cybersecurity firm, the go-to for governments and companies across the world when dealing with security breaches, said the hackers were likely “a nation with top-tier offensive capabilities,” The New York Times reported.

The breach of FireEye’s cybersecurity systems used “novel techniques,” the company noted, with Russian intelligence services named as a prime suspect, the Times reported, citing federal authorities.

“We have confidence in FireEye’s long-term strategic vision and its world-class set of cybersecurity products and services,” Patel, Blackstone’s senior managing director, said in a press statement.