Sourcefire Rejects Buy Offer From Barracuda Networks

SNORT and ClamAV maker Sourcefire turned down a stock purchase offer from Barracuda Networks that would have combined the two companies into one.

Last week Barracuda's board of directors sent an unsolicited proposal to Wayne Jackson, CEO of Sourcefire. Barracuda offered to pay $7.50 per share to acquire all outstanding shares of Sourcefire's common stock, which was approximately 13 percent above the May 20th closing price of the stock. Barracuda uses ClamAV in its line of security appliances.

At the time of the offer Dean Drako, president and CEO of Barracuda Networks, said that "Sourcefire has made very powerful contributions to open source efforts worldwide through its acquisition of ClamAV and its continued development of SNORT, the de-facto intrusion detection and prevention technology. The combined company will be a more effective and profitable competitor with the ability to better meet the evolving demands of the market."

However, Sourcefire's board turned down the offer, saying that it believes "that the proposal substantially undervalues Sourcefire." Sourcefire's chairman commented that "Sourcefire remains committed to maximizing stockholder value by continuing with its stated plans to complete its Chief Executive Officer transition and growing the business by executing on its strategy."

In February Jackson announced that he would step down from his role as company CEO to seek other opportunities. Sourcefire is currently seeking a replacement.

Sourcefire transitioned to a public company in early 2007 and at times experienced stock bids of over $18 per share. The company's stock systemically dropped in price since its initial public offering but has since rebounded to some extent. The stock was trading at around $6.70 early last week and as of June 2nd the priced had risen to approximately $7.66 per share, surpassing the price offered by Barracuda Networks.