Cisco to buy Sourcefire for $2.7bn

Cisco Systems, the biggest maker of networking equipment, agreed to acquire Sourcefire for about $2.7 billion, adding cybersecurity technology.

Cisco will pay $76 a share in cash and assume outstanding equity awards in the transaction, which also includes retention-based incentives, California-based Cisco said today in a statement.

The offer represents a 29 per cent premium over Sourcefire’s closing price yesterday.

Cisco chief executive officer John Chambers is stepping up investments in data networks to help accommodate users who are increasingly relying on smartphones and tablets to watch video and surf the Web.

Adding Sourcefire’s products will help Cisco guard networks against hacker attacks by helping to prevent and detect infiltrations.

“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,” Christopher Young, senior vice president of Cisco’s security group, said in the statement.

The boards of both companies have approved the transaction, which is expected to close during the second half of 2013.

Cisco said the purchase will be slightly dilutive to adjusted earnings in fiscal 2014 due to purchase accounting adjustments and integration costs.

Bloomberg