Cisco Systems Inc. announced it will be buying Sourcefire Inc. for approximately US $2.7 billion. The acquisition of the software maker is in line with Cisco's intent to boost its network security services.
It has been revealed that the network equipment company will pay US $76 for each share of the company. The amount is 28.6% more than its Monday closing price pegged at US $59.08. Additionally, the deal will most likely be closed in the second half of the year.
Over the past few years, Cisco fell behind in network security. It has lost market share in favor of more inventive competitors like Check Point Software Technologies, Juniper Networks Inc. and Palo Alto Networks Inc. It also slid down in video streaming, social media and web applications that require for a more complicated security protection.
Robert Breza, an analyst from RBC Capital Markets, said that the transaction "removes a key competitor from the market for Check Point, Fortinet and Palo Alto (Networks) but also strengthens Cisco's position in the space".
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