Sourcefire Acquired By Cisco for $2.7B

Martin Roesch

Cisco (NASDAQ: CSCO) and Sourcefire (NASDAQ: FIRE) today announced a definitive agreement for Cisco to acquire Sourcefire, a leader in intelligent cybersecurity solutions. Cisco and Sourcefire will combine their world-class products, technologies and research teams to provide continuous and pervasive advanced threat protection across the entire attack continuum -- before, during and after an attack -- and from any device to any cloud.

Mobility, cloud and the evolution of the "Internet of Everything" are drastically changing today's IT security landscape, making traditional disparate products insufficient to protect organizations from dynamic threats. Sourcefire delivers innovative, highly automated security through continuous awareness, threat detection and protection across its industry-leading portfolio, including next-generation intrusion prevention systems, next-generation firewalls, and advanced malware protection.

The acquisition of Sourcefire adds a team with deep security DNA to Cisco and will accelerate delivery of Cisco's security strategy of defending, discovering, and remediating advanced threats. With world-class research teams, increased intelligence and expanded threat protection, customers will benefit from continuous security in more places across the network.

Under the terms of the agreement, Cisco will pay $76 per share in cash in exchange for each share of Sourcefire and assume outstanding equity awards for an aggregate purchase price of approximately $2.7 billion, including retention-based incentives. The acquisition has been approved by the board of directors of each company.

"'Buy' has always been a key part of our build-buy-partner innovation strategy," said Hilton Romanski, vice president, Cisco Corporate Development. "Sourcefire aligns well with Cisco's future vision for security and supports the key pillars of our security strategy. 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 notion of the 'perimeter' no longer exists and today's sophisticated threats are able to circumvent traditional, disparate security products. Organizations require continuous and pervasive advanced threat protection that addresses each phase of the attack continuum," said Christopher Young, senior vice president, Cisco Security Group. "With the acquisition of Sourcefire, we believe our customers will benefit from one of the industry's most comprehensive, integrated security solutions -- one that is simpler to deploy, and offers better security intelligence."

"Cisco's acquisition of Sourcefire will help accelerate the realization of our vision for a new model of security across the extended network," said Martin Roesch, founder and chief technology officer of Sourcefire. "We're excited about the opportunities ahead to expand our footprint via Cisco's global reach, as well as Cisco's commitment to support our pace of innovation in both commercial markets and the open source community."

The acquisition is expected to close during the second half of calendar year 2013, subject to customary closing conditions and regulatory reviews. Cisco expects the acquisition to be slightly dilutive to non-GAAP earnings in fiscal year 2014 due to normal purchase accounting adjustments and integration costs. Once the transaction closes, Cisco will include Sourcefire into its guidance going forward. Prior to the close, Cisco and Sourcefire will continue to operate as separate companies. Upon completion of the transaction Sourcefire employees will join the Cisco Security Group led by Christopher Young.

Sourcefire was founded in 2001 and completed its initial public offering in 2007. The company is based in Columbia, MD, an area widely recognized as a center of excellence for security innovation, and has more than 650 employees worldwide. For the full year ended December 31, 2012, Sourcefire reported revenue of $223.1 million, an increase of 35 percent year-over-year.

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