Cisco to acquire cybersecurity supplier Sourcefire

Cisco (NASDAQ: CSCO) expects to beef up the security of cloud networks through the acquisition of Sourcefire (NASDAQ: FIRE), a supplier of intelligent cybersecurity products. The acquisition agreement calls for Cisco to pay $76 per Sourcefire share in cash and assume outstanding equity awards for an aggregate purchase price of approximately $2.7 billion. The figure includes retention-based incentives.

The board of directors of each company have approved the deal.

Sourcefire provides automated security for cloud-based IT infrastructures through continuous awareness, threat detection, and protection via intrusion prevention systems, firewalls, and malware protection. Founded in 2001 and headquartered in Columbia, MD, Sourcefire reported revenue of $223.1 million last fiscal year, an increase of 35% year-over-year.

"‘Buy' has always been a key part of our build-buy-partner innovation strategy," said Hilton Romanski, vice president, Cisco Corporate Development. "Sourcefire aligns well with Cisco's future vision for security and supports the key pillars of our security strategy. Through our shared view of the critical role the network must play in cybersecurity and threat defense, we have a unique opportunity to deliver the most comprehensive approach to security in the market."

"The notion of the ‘perimeter' no longer exists and today's sophisticated threats are able to circumvent traditional, disparate security products. Organizations require continuous and pervasive advanced threat protection that addresses each phase of the attack continuum," said Christopher Young, senior vice president, Cisco Security Group. "With the acquisition of Sourcefire, we believe our customers will benefit from one of the industry's most comprehensive, integrated security solutions – one that is simpler to deploy, and offers better security intelligence."

"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 and chief technology officer of Sourcefire. "We're excited about the opportunities ahead to expand our footprint via Cisco's global reach, as well as Cisco's commitment to support our pace of innovation in both commercial markets and the open source community."

The acquisition is expected to close during the second half of calendar year 2013, subject to customary closing conditions and regulatory reviews. Cisco expects the acquisition to be slightly dilutive to non-GAAP earnings in fiscal 2014 because of what it described as “normal purchase accounting adjustments and integration costs.” Upon completion of the deal, Sourcefire employees will join the Cisco Security Group led by Christopher Young.

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