Cisco Systems Inc. (CSCO) has agreed to buy cybersecurity firm
Sourcefire for $2.7 billion, a move that will bolster the
technology giant's security offerings.
The purchase continues a string of relatively small acquisitions
by the San Jose, Calif., company, which is trying to evolve into a
less hardware-intensive information-technology provider as growth
from its traditional network equipment business slows.
Columbia, M.D., based Sourcefire offers products like intrusion
prevention systems, firewalls, and malware protection.
Under the terms of the agreement, Cisco will pay $76 a share in
cash for each Sourcefire share, a 29% premium to Monday's close.
The purchase price also includes retention-based incentives.
"Sourcefire aligns well with Cisco's future vision for security
and supports the key pillars of our security strategy," said Hilton
Romanski, vice president of corporate development at Cisco.
"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 deal is expected to close in the second half of this year.
Cisco expects the deal to slightly hurt adjusted earnings in fiscal
2014.
Sourcefire was founded in 2001 and went public in 2007. For
2012, Sourcefire reported revenue of $223.1 million, an increase of
35% from the year earlier.
The move comes roughly a month after Cisco agreed to buy
privately held database integrator Composite Software Inc. for $180
million, a bid to expand its growing collection of software and
services.
Shares of SourceFire, which were halted premarket, closed Monday
at $59.08, while those of Cisco were up by five cents to
$25.77.
Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires