Cisco Systems to acquire Sourcefire for $2.7bn Cisco Systems agreed to buy cybersecurity firm Sourcefire for $2.7bn, as the technology company looks to meet the growing demand for protection against computer and network attacks. Sourcefire earned $5m in after-tax profit last year on $223m in revenue. Cisco will pay $76 per share for the Columbia, Maryland-based company, about 29 per cent higher than the company's closing price on Monday of $59.08. "This can't be just a pure revenue buy," said Adam Hils, research director at Gartner, the analyst. If I were Cisco, I'd be looking for ways to use Sourcefire's security expertise to do something unique in the industry. Cisco has fallen behind smaller competitors such as Palo Alto Networks and Check Point with its cybersecurity offerings. The number of customers that have bought Cisco's technology for preventing cyber intruders has been decreasing, Mr Hils said. Sourcefire, whose revenues increased 35 per cent last year, will give the company a new standalone offering to make it more competitive. Christopher Young, senior vice-president of Cisco's security group, said the acquisition brings a product that is simpler to deploy and better addresses the complexity of today's cyber attacks. "The notion of the "perimeter" no longer exists and today's sophisticated threats are able to circumvent traditional, disparate security products," he said in a statement. Organisations require continuous and pervasive advanced threat protection. Researchers from FBR Capital Markets called the deal the "tip of the iceberg" in an approaching surge of mergers and acquisitions in the cybersecurity market over the next 12 to 18 months. The deal follows the acquisition of another web security provider, Websense, by private equity firm Vista Equity Partners, last month. "There is more consolidation on the horizon," Mr Hils said. Large companies such as IBM, Juniper, Symantec and EMS could look to acquire smaller security companies such as Check Point or Fortinet, FBR researchers wrote in a note. The Cisco-Sourcefire deal is expected to close in the second half of the year, pending regulatory reviews. Cisco said earnings in 2014 would be slightly diluted as a result of the purchase. Shares in Cisco fell 8 per cent to $25.50 when the deal was announced, then rallied back to its opening price in midday trading on Tuesday. Sourcefire's stock price spiked 28 per cent above the previous day's closing to $75.77.