Cisco to acquire Riverhead Networks; Brightmail files for IPO

Cisco Systems announced a definitive acquisition agreement to purchase Riverhead Networks for $39 million. Antispam vendor Brightmail plane to go public.

Networking giant Cisco Systems announced a definitive acquisition agreement to purchase Cupertino, Calif.-based Riverhead Networks, a denial-of-service mitigation vendor, for about $39 million. The announcement comes only 11 days after Cisco entered an agreement to buy Mountain View, Calif.-based Twingo Systems, maker of SSL VPNs, for $5 million.

"This acquisition further enhances Cisco's strategy to build secure intelligent global networks that seamlessly integrates security and other intelligent services with the network infrastructure," said Luca Cafiero, senior vice president of the Cisco Switching, Voice and Storage Technology Group. The company already had a 10% stake in Riverhead.

Riverhead Networks adds to Cisco's security arsenal its two distributed denial-of-service products: Riverhead Detector, which identifies suspicious network activity, and Riverhead Guard, which alerts administrators of any unusual traffic and diverts suspicious packets. The suspicious activity is then examined and any packets deemed "dangerous" are removed.

The acquisition strengthens Cisco's position in anomaly detection. Along with Riverhead's network-based IDS, Cisco last year bought host-based IDS vendor Okena for $154 million.

By comparison, the transaction with Riverhead Networks is estimated to be worth approximately $39 million in cash and is expected to close in the third quarter of 2004.

Brightmail files for IPO
On another bright note in the information security business world, San Francisco-based Brightmail, an antispam vendor, filed for its Initial Public Offering (IPO), becoming one of the few technology IPOs this year. Brightmail is believed to be one of the largest antispam vendors in the security industry.

According to a Dow Jones News Wire report, the IPO will be listed with NASDAQ for an estimated $80 million in common stock. Net proceeds will be used for corporate purposes, capital expenditures and possible acquisitions, according to a newspaper report.

Details of the IPO have not been released. J.P. Morgan Securities Inc., Lehman Brothers Inc. and Pacific Crest Securities Inc. will underwrite the IPO.

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