Cisco Buys Security Vendor Sourcefire

Cisco has announced that it plans to purchase Sourcefire for $2.7 billion. Sourcefire makes network security products, many of which are based on open source software.

Michael J. De La Merced with the New York Times reported, “Cisco Systems agreed on Tuesday to buy Sourcefire, a provider of cybersecurity services, for about $2.7 billion in cash, in a reflection of the growing fervor for companies that can help guard against computer-based attacks. Under the terms of the deal, Cisco will pay $76 a share in cash, nearly 30 percent higher than Sourcefire’s closing price on Monday. The offer includes retention-based incentives for Sourcefire’s executives.”

All Things D’s Arik Hesseldahl noted, “Sourcefire specializes in intrusion-detection appliances. Its products are based on open-source intrusion-detection software called Snort, which it created. It was started in 2001, has about 650 employees, and reported sales of about $220 million in 2012.”

The Register’s John Leyden observed, “Cisco’s acquisition of Sourcefire gives it extra ammunition in its fight against competitors such as Check Point, Symantec, Juniper and McAfee/Intel in the security appliances and services market. It also boosts its tech line-up against system vendors such as IBM and HP.”

According to Nicola Leske with Reuters, “More acquisitions should be on the way in the tech security sector, which Research firm IDC has said spending this year should generate 7.8 percent revenue growth for vendors. ‘We view this morning’s news as ‘game changing’ for the cyber security space as we expect a surge of consolidation to take place over the next 12 to 18 months,’ Daniel Ives, a tech analyst with FBR Capital Markets.”