Shares of cybersecurity provider FireEye Inc rose as much as 35 per cent on Friday after the company bought computer forensics specialist Mandiant Corp for US$1 billion in a deal that underscores increasing consolidation in the red-hot sector.
The share spike added about US$1.7 billion to FireEye's market value, which has more than doubled since the company went public in September.
"This deal speaks to our thesis around massive consolidation in the security landscape for 2014, with names such as Fortinet Inc and Proofpoint Inc as prime acquisition candidates ...," FBR Capital Markets analyst Daniel Ives wrote in a note.
Cybersecurity companies are in high demand because of the scarcity of large public corporations in that market and the growing threat of online crime worldwide.
Analysts have said larger players such as IBM, Symantec and Hewlett Packard could look to acquire smaller security players to help drive growth as spending on cybersecurity increases.
Cisco Systems Inc said in July it would buy cybersecurity company Sourcefire Inc for $2.7 billion.
Mandiant is best known for its forensics services.
The company rose to prominence in February 2013 when it published a report detailing what it said were links between a Shanghai-based unit of the People's Liberation Army and a long list of attacks on US companies.
Beijing had denied the allegations.