IT company Cisco has announced that it will be acquiring cyber security solution company Sourcefire for a sum of USD 2.7 billion. According to an agreement, Cisco will be paying USD 76 per share in cash in exchange for each share of Sourcefire.
Sourcefire employees will join the Cisco Security Group led by Christopher Young after the completion of deal which is expected to be closed during the second half of 2013. Prior to that, Cisco and Sourcefire will continue to operate as separate companies.
Sourcefire provides automated security and protection including next-generation intrusion prevention systems, firewalls, and advanced malware protection.
Cisco’s acquisition of Sourcefire will help accelerate the realization of our vision for a new model of security across the extended network,” said Martin Roesch, founder & CTO, Sourcefire.
Cisco has fallen behind smaller competitors such as Palo Alto Networks and Check Point with its cybersecurity offerings and the number of customers that have bought Cisco’s technology for security has also decreased. Cisco has been looking to boost its network security business, and expects to be the top player in security to shed its reputation being lagging in that area. SourceFire acquisition can be seen as an attempt to reach that goal.
Hilton Romanski, vice president, Cisco Corporate Development said that Sourcefire aligns well with their future vision for security and supports the key pillars of their security strategy. The acquisition will help Cisco to add security DNA to it and will also help in accelerating delivery of security strategy of defending, discovering, and remediating advanced threats.
With the increase of web applications, social media and video streaming websites, the need for web Security protection have also grown. As per Daniel Ives, a tech analyst with FBR Capital Markets, many larger technology companies like IBM, Juniper, Symantec, and EMC might also look to acquire smaller security companies due to a high priority that security has in the IT spendings.
Many even see the Sourcefire acquisition as a beginning of more such deals in the IT security.
This would be its third security related acquisition of Cisco, previously it had acquired security software firm ScanSafe Inc., based in London and San Francisco in 2009, and Czech artificial-intelligence firm Cognitive Security this year for an undisclosed amount.
Based in Columbia, MD, SourceFire was founded in 2001 and has completed its initial public offering in 2007. It has more than 650 employees worldwide and for the year ended December 31, 2012, Sourcefire reported revenue of USD 223.1 million, an increase of 35 percent year-over-year.