Shares of cloud-based security provider FireEye shot up almost 10% in late trading Thursday evening after the company announced[1] that private equity firm Blackstone Group is making a $400 million investment in the company and taking a board seat.
FireEye announced in a separate press release[2] that it will buy four-year-old security startup Respond Software of Mountain View, Calif., for $186 million in cash and stock.
New York-based Blackstone, one of the most powerful private equity firms in the world, with a market cap of $67 billion or so, is teaming up with venture capital firm ClearSky Power & Technology Partners, based in Juno Beach, Florida, to buy $400 million worth of convertible stock in FireEye.
The duo will purchase "shares of a newly designated 4.5% Series A Convertible Preferred Stock of FireEye," said FireEye, "with a purchase price of $1,000 per share."
The Series A Preferred will be convertible into shares of FireEye's common stock at a conversion price of $18.00 per share, the company said.
A senior managing director at Blackstone, Viral Patel, will take a seat on FireEye's board, the company said.
Said Patel, "Blackstone and FireEye have a shared vision of the unique role FireEye can play in addressing the increasingly sophisticated cyber security challenges their customers face."
"We are excited to partner with the company's board and management to accelerate execution on their vision."
Also: FireEye Q3 results beat expectations, raises year view, shares jump 6%[3]
Proceeds of the convertible offering will be put toward the purchase of Respond, the company said, as well as "increased investment to accelerate the growth of the company's cloud, platform and managed services portfolio," it said.
Respond makes software in the