On Tuesday, Cisco (CSCO) announced that it will pay $76 a share for Sourcefire (FIRE), a 29% premium over the network security provider’s last closing share price. Not surprisingly, shares of SourceFire leapt more than 27% in Tuesday morning trading.
The all-cash acquisition will cost Cisco about $2.37 billion. A company official said that Sourcefire’s technology would boost Cisco’s own network security services, the Associated Press noted.
Last year, Sourcefire generated annual revenue of $223.1 million. The company went public in 2007, six years after it was founded.
The purchase is anticipated to close during this second half of this year.
In May, Cisco posted fiscal third-quarter earnings and revenue that topped Wall Street expectations. Over the past year the company has restructured, divested non-core assets and pursued growth markets.
Shares of Cisco fell slightly in Tuesday morning trading.