Check Point Software (NASDAQ:CHKP), which develops security technologies, announced that it is making a big bet by spending about half its cash balance (or $586 million) on Protect Data AB, which is publicly traded in Stockholm. Basically, the deal will help fill a major gap in Check Point's security offering, as well as help boost growth.

Founded in 1993, Check Point Software has a full suite of software and hardware products to help secure networks -- especially those connected to the Internet. As a testament to the company's technology, all companies in the Fortune 100 use Check Point security solutions.

As for Protect Data, the company develops security technologies to protect mobile devices and laptops, which has been a growth market. The company markets its products through a division called Pointsec Mobile Technologies.

Nick Selby, a senior analyst for Enterprise Security at The 451 Group, knows this industry well. "Pointsec's flagship whole-disk encryption products protect the data on mobile phones," he told me in an interview, "and the company has seen great success on the ease of use and, more important, central management."

On the face of it, the deal looks expensive. Based on trailing revenues, the purchase price comes to about 8 times sales. Then again, Protect Data is growing at a torrid rate. Over the past nine months, revenues increased by about 92%. The company is also profitable, with about $8.3 million in net income for this year so far.

Thus, even for a company the size of Check Point -- with $415 million in revenues for the first nine months of 2006 -- Protect Data will have a material impact. What's more, with Check Point's extensive channel network, it is possible for it to wring more growth from Protect Data.

While there is much opportunity in the security space, there is also tremendous competition, such as from IBM (NYSE:IBM), EMC (NYSE:EMC), McAfee (NYSE:MFE), and Symantec (NASDAQ:SYMC). As a result, it is critical for a company to provide a comprehensive set of best-of-breed solutions. And it's certainly the case that Protect Data will help Check Point round out its offerings.

Symantec is a Motley Fool Inside Value selection, while McAfee is a former Motley Fool Stock Advisor pick.

Fool contributor Tom Taulli does not own shares mentioned in this article. He is currently ranked 50 out of 13,680 in Motley Fool CAPS, The Motley Fool's new community intelligence stock-picking service.