About a year ago the two companies entered into a technology development agreement that made it easier to deploy their products together. With the merger, FireEye will gain Mandiant's team of forensics investigators.
"They have these very strong Navy 'cyber' Seals who respond to breaches and are very good at what they do," DeWalt said about Mandiant. He had previously served as chairman of Mandiant's board.
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"My aim is to create the strongest security company in the world," DeWalt said in an interview.
FireEye, which has yet to post a profit, said the acquisition will be immediately accretive to earnings and expects the combined company's revenue to grow about 50 percent this year. In comparison, Symantec, the biggest maker of anti-virus software, has said it expects fiscal 2014 revenue to drop 3 percent to 4 percent.
Mandiant is best known for its forensics services. The company rose to prominence in February 2013 when it published a report detailing alleged links between a Shanghai-based unit of the People's Liberation Army and a long list of attacks on U.S. companies. Beijing denied all allegations in the report.
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Stock and Cash
Mandiant, which has long been profitable, generates sales of more than $100 million a year, according to DeWalt.
FireEye in November forecast its 2014 revenue to be between $240 million and $250 million, up from an estimated $156 million to $158 million for 2013. DeWalt has declined to say when he expects the company to be profitable.
FireEye, which has a market capitalization of around $5 billion, will pay for Mandiant with a combination of stock and cash. It issued 21.5 million shares and options, which were worth $939 million on Monday, when the stock closed at $43.69.
A company spokesman said it had about 140 million shares outstanding after the deal was completed.
It will also pay $106.5 million in net cash to Mandiant's shareholders, who include Mandia as well as Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers and One Equity Partners, the private investment arm of JPMorgan Chase.
DeWalt said he owns some shares in Mandiant and will disclose the size of his stake within a few days through a filing with the Securities and Exchange Commission.
FireEye's rival include Palo Alto Networks, which went public in 2012 in one of that year's most successful IPOs.
Mandiant was founded in 2004 by Kevin Mandia, a former U.S. Air Force cyberforensics investigator who co-authored an influential textbook on the subject. The company made its name by automating processes used to investigate computer breaches.
The company was largely unknown outside the computer security world until February, when it fingered the People's Liberation Army's Shanghai-based Unit 61398 as the most likely driving force behind a Chinese hacking group known as APT1.
Other security companies had published reports on cyberattacks, but had shied away from so clearly identifying their perpetrators.
DeWalt said FireEye would consider releasing similar reports now that it owns Mandiant.
"You will probably see us continue to do it when it is appropriate," he said. "There is some incredibly egregious behavior."
DeWalt is the former chief executive of anti-virus software maker McAfee who sold McAfee to Intel.
Mandia was named FireEye's chief operating officer. He said in an interview that he plans to move to Silicon Valley, where FireEye has its headquarters, from the Washington, D.C., area.
"I'm in this for the long-term," he said. "This is as exciting as heck for me."