Jakarta (ANTARA News) – Sisco System said it will buy software company Sourcefire Inc. for about $ 2.7 billion to improve the network security services.
Sisco will pay 76 dollars for each share of Sourcefire, 28.6 percent higher than the closing market price premium 59.08 dollars Monday, Reuters said in a report on Tuesday.
The networking equipment company said the deal would likely close the second quarter of 2013 and estimates that there will be a dilution thin on non-GAAP earnings in fiscal year 2014.
Sisco has been losing market share in network security last year, lower than the more innovative rivals such as Networks Inc., Check Point Software Technologies, and Palo Alto Networks Inc..
Sisco compete in Web applications, social media and video streaming that require security protection is more complex than traditional firewalls.
RBC Capital Markets analyst Robert Breza said the deal would eliminate a key competitor in the market for Check Point, Fortinet, and Palo Alto, but also strengthen the position of Sisco in the industry.
It would also create a major competitor in the network security industry, he said, adding that Sourcefire will bring the technology of real-time network awareness (RNA) and intrusion prevention system (IPS) to Sisco.