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Cisco spends cool $2.7 billion in Sourcefire acquisition

Robert Richardson, Editorial Director

Cisco has announced that it will purchase IPS and next-generation firewall provider Sourcefire for $2.7 billion, saying it will pay $76 per share in cash for the Columbia,

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Md.-based company.

This isn't the first time Sourcefire has been courted. In 2005, Check Point offered $225 million and the bid was accepted, but the deal fell through because concerns in the U.S. Congress were likely to hold up or stop the sale. The present Sourcefire acquisition is not only for a much larger sum, but also makes this the largest security company purchase since Intel's 2011 purchase of McAfee for $7.68 billion.

A statement from Cisco said the combined security capabilities will enable the company to "provide continuous and pervasive advanced security threat protection across the entire attack continuum and from any device to any cloud." Hilton Romanski, vice president of Cisco's corporate development, said that taken together, the two companies "have a unique opportunity to deliver the most comprehensive approach to security in the market."

Maybe not absolutely comprehensive though. Jim Ricotta, CEO of Verdasys, said he sees the new team as "just one part of the solution." In his view, there is still "a gaping hole in the kill-chain defense against both malicious insider and malware." Still plenty of room for a company like Verdasys, Ricotta believes, since data security is still left out of the equation in the Sourcefire purchase.

Mike Rothman, Securosis analyst and president, said the acquisition is nevertheless "a very big deal." Noting that Cisco has, in the past, sometimes floundered when integrating acquired companies, he said, "If -- and it's a giant 'if' -- Cisco can do a good job of this, you can't beat Cisco's distribution channel in networking."

"If they let [Sourcefire founder] Marty Roesch do his job and they give him the resources to do it," Rothman said, "this could get pretty interesting." Roesch founded the company in 2001 to capitalize on the success of his open source intrusion detection engine Snort.

Rothman said an acquisition of IPS and next-gen firewall technology was necessary if Cisco was going to be a significant player in the security arena. "Cisco had to do something, and this was the best something they could do," he said, noting that some other potential aquisition targets would have been considerably more expensive.


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