Cisco inks deal to buy Sourcefire for $2.37B

SAN JOSE, Calif. Cisco Systems (CSCO) said Tuesday that it has reached a deal to buy computer network security company Sourcefire for about $2.37 billion in cash.

Under the terms of the agreement, Cisco will pay $76 cash for each of the Columbia, Md.-based company's shares. The price represents a 29 percent premium over Sourcefire's Monday closing stock price.

Sourcefire (FIRE) shares were up $16.43, or nearly 28 percent, to $75.51, in later-afternoon trading.

Cisco said the addition of Sourcefire will boost its own cybersecurity offerings and speed development of its security strategy of defending, discovering and remediating advanced threats.

"Sourcefire aligns well with Cisco's future vision for security and supports the key pillars of our security strategy," Hilton Romanski, Cisco's vice president for corporate development, said in a statement.

The deal also includes the assumption of outstanding stock awards and retention-based incentives. The companies valued it at about $2.7 billion.

Cisco said it expects the deal, scheduled to close in the second half of 2013, to slightly reduce its adjusted profit for fiscal year 2014.

Sourcefire was founded in 2001 and went public in 2007. In 2012, its revenue jumped 35 percent to $223.1 million.

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