Sourcefire, Check Point drop merger talks

The planned merger of two security companies, Sourcefire and Check Point Software, has fallen through. The companies have announced that they are withdrawing their merger filing with the Committee on Foreign Investment in the United States.

Check Point was to have acquired Sourcefire for about $225 million under the planned transaction, announced in October 2005. Sourcefire is an intrusion-prevention system vendor, with a flagship product called Snort. Check Point offers a variety of security products, primarily known for firewalls and virtual private network security systems.

The two companies have determined it would be more beneficial to develop a partnership rather than go through with the acquisition, said Gil Shwed, chief executive officer of Check Point.

"We've decided to pursue alternative ways for Check Point and Sourcefire to partner," he said in a written statement.

The companies had filed documents with the committee because that body – made up of federal agencies -- reviews foreign firms’ planned acquisitions of U.S. companies. Although Check Point maintains a U.S. headquarters in Redwood City, Calif., its home base is Israel.

Wayne Jackson, CEO of Sourcefire, said he was relieved that the acquisition process has ended. The company has been successful in the months since the acquisition announcement, and its 2005 revenues grew more than 70 percent over 2004 figures, according to a Sourcefire announcement.

“We truly look forward to moving forward as a stand-alone entity,” Jackson said in a prepared statement. “While we maintain the highest respect for the Check Point team, we are relieved that the process has reached a conclusion and look forward to exploring our partnership opportunities.”