The proposed transaction calls for Cisco to pay $76 per share in cash for each Sourcefire share and assume Sourcefire's outstanding equity awards for a total price of approximately $2.7 billion. The per-share price represents a 29% premium over Sourcefire's Monday closing stock price. Sourcefire shares jumped $16.71, or 28%, to $75.79 in morning trading.
"Sourcefire aligns well with Cisco's future vision for security and supports the key pillars of our security strategy. ... [W]e have a unique opportunity to deliver the most comprehensive approach to security in the market," said Hilton Romanski, VP Cisco corporate development, in a statement.
Sourcefire founder and CTO Martin Roesch was quoted in the press release as saying, "Cisco's acquisition of Sourcefire will help accelerate the realization of our vision for a new model of security across the extended network."
Cisco and Sourcefire will continue to act as separate companies until the deal is closed, which is expected to happen in the second half of 2013. At that time, Sourcefire employees will join the Cisco Security Group. The Columbia, Md.-based Sourcefire has more than 650 employees deployed worldwide. Cisco is headquartered in San Jose, Calif. Sourcefire was founded in 2001 and completed its IPO in 2007.
-- Material from The Associated Press was used in this report.