Seeking to build out its security solutions platform, information technology network supplier Cisco [CSCO] yesterday said it has agreed to acquire cyber security solutions provider Sourcefire, Inc. [FIRE] in a $2.7 billion deal.
Cisco said its customers are driving demand for more holistic, integrated security architectures and that the acquisition of Sourcefire would accelerate its ability to offer comprehensive security solutions.
“The goal of our strategy is to deliver to our customers what they want, a continuous and highly automated approach to protection across the entire attack continuum before, during and after an attack while driving cost and complexity out of the system,” Chris Young, senior vice president of Cisco’s Security Group, said on an analyst call to discuss the acquisition.
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The security market is moving beyond point detection products to “integrated, intelligent solutions” that provide continuous defense and remediation of threats, Young said.
Young said there are three pillars to Cisco’s security strategy. The first is offering a security services platform where security is “an integral part of the network and the data center fabric,” he said.
The second aspect of the strategy is being able to deliver security from and within the network cloud environment “and aggregate the intelligence from the billions of daily transactions across our security installed base,” Young said. “Today we provide web and email security in the cloud. In the future we expect to extend to other services like applications, data and ultimately user security.”
The third pillar is having the network behave as “a core sensor base and provider of context and enforcement helping our customers determine when, where and how to take actions, making them faster and more effective at addressing threats,” Young said. The Sourcefire acquisition accelerates Cisco’s work on all three pillars of the strategy, he added.
Sourcefire, which was founded in 2001 and went public in 2007, has more than 2,500 customers in more than 180 countries. Customers include most of the Fortune 100 companies, 42 percent of the Global 500, and the armed forces of the United States and federal civilian agencies.
One of Sourcefire’s key products is its Snort intrusion detection and prevention technology, an open source software tool with nearly 4 million downloads. The company also offers network security and malware protection products.
Sourcefire had $223.1 million in sales in 2012, a 35 percent increase over 2011, and net income of $5 million, a drop of $1.2 million from the prior year. The Maryland-based company has 650 employees.
Cisco said the deal complements its existing security portfolio and provides it with deep security expertise. The company also noted that Sourcefire’s footprint in the Maryland and Washington, D.C., region positions it in an area known for its security innovation.
The transaction calls for Cisco to pay $76 in cash for each share of Sourcefire while assuming outstanding equity awards. Centerview Capital is Cisco’s financial advisor on the deal and Sourcefire is being advised by Qatalyst Partners.