Cisco Systems, Inc. (Nasdaq:CSCO) is betting that in this age of cyberwarfare, corporate electronic espionage, communications monitoring by nosy governments and identity thieves, computer network security will be more important than ever.
That's why the Silicon Valley tech giant announced it’s paying $2.7 billion, or $76 a share, for Columbia, Md.-based cybersecurity firm Sourcefire, Inc. (Nasdaq:FIRE).
“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,” the companies said in a joint statement before markets opened on Tuesday.
Sourcefire makes hardware and software to mitigate cyberthreats for companies and governments. About a third of the company’s revenue comes from outside the United States. Sourcefire will present its second quarter earnings on July 29 after markets close. Analysts polled by Thomson Reuters expect the company to report $4.8 million in profit.
In May, Cisco said it would see increased revenue in its current quarter, allaying concerns that its earnings would be hurt by weaker tech spending across the sector.
The deal is expected to close before the end of the year. The news raised Sourcefire’s share price by more than 28 percent in pre-market trading on Tuesday to $59.08.
Cisco’s move comes as the Pentagon has made combating cyberthreats a major focus in the coming years.