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Merger Arbitrage Mondays – Google Acquires Cybersecurity Firm Mandiant

  • March 14, 2022

Merger activity declined last week with three new deals announced and five deals completed. Two of the three new deals announced were potential deals in the works. I was surprised to see that four SPAC combinations were terminated. Clearly the SPAC bubble continues to deflate due to unfavorable market conditions. Things are however starting to look very interesting on the merger arbitrage front. We have identified three deals that look attractive to us and we will be writing about them in our March mid-month update for premium subscribers.

When we launched Inside Arbitrage in 2018 we were tracking two strategies including merger arbitrage and insider trading. Since then we have expanded both the breath and depth of the service including adding new verticals like SPACs, spinoffs and stock buybacks as well as adding new tools within each vertical. The latest upgrade is to our Merger Arbitrage Tool and our Deal Metrics page, which now display the termination fee for deals including details about what the acquiring company may have to pay if the deal fails and what the target may have to pay if they find a better offer or they breach a key condition of the merger. You can see an example of our deal metrics page for the $6.8 billion acquisition of Coherent (COHR) by II-VI Incorporated (IIVI) here.

Mandiant (MNDT)

Founded in 2004 and based in Milpitas, California, Mandiant is a cybersecurity firm. The company has a history of uncovering severe cybersecurity threats, including a report it published in 2013, that implicated China in cyber espionage. This report helped Mandiant garner a reputation for its incident response services. Mandiant was acquired by FireEye in 2013. The company, however split last year, with FireEye being sold to a private equity consortium.

We added Mandiant as a potential deal in the works on February 8, 2022, when Bloomberg reported that Microsoft (MSFT) was in talks to acquire the company. MNDT’s price after this announcement was $17.75. According to a report, Microsoft ended its takeover discussions on concerns that Mandiant’s collection of security businesses wasn’t a good enough strategic fit.

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