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Sourcefire Up 30 Percent on News of Cisco Acquisition (FIRE)

In a press release Tuesday, Cisco (NASDAQ: CSCO) and Sourcefire (NASDAQ: FIRE) announced an agreement where Cisco will acquire the cybersecurity company for $76 per share.

The price represents a 29 percent premium over Monday’s closing price and values the deal at about $2.7 billion. The deal will likely close during the second half of 2013, according to the release.

Cisco is likely buying the company to reinvigorate a part of its business that has lost market share to smaller competitors over the past couple of years. Like many of the old tech names, new technologies like social media and video left its security offerings outdated. The acquisition of Sourcefire not only brings new technology but a supply of fresh talent to help Cisco ramp up its network security arm.

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Disclosure: At the time of this writing, the author had no position in the company mentioned.

 

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