While the broader market was largely quiet Tuesday, one sector was on fire: cybersecurity.
The deal, which was priced at a 29% premium over Sourcefire's closing price Monday, will help Cisco bolster its network security services.
"Today's sophisticated threats are able to circumvent traditional, disparate security products," said Christopher Young, senior vice president in Cisco's security group. "With the acquisition of Sourcefire, we believe our customers will benefit from one of the industry's most comprehensive, integrated security solutions – one that is simpler to deploy, and offers better security intelligence."
The deal might just be the "tip of the iceberg" when it comes to mergers and acquisitions in the cybersecurity space, according to FBR analyst Daniel Ives. He expects a rush of deals, with big players like IBM (IBM), Juniper (JNPR), Symantec (SYMC) and EMC (EMC) buying up smaller firms.
Traders on StockTwits had mostly positive reviews of the deal.
Cisco had a pretty stellar first quarter, and analysts are hoping to see some of the same this time around. They expect Cisco to report a 6% jump in earnings and a 9% bump in revenue.
Speculation about which firms could be the next takeover targets was also a hot topic, pushing shares of several other cybersecurity companies higher Tuesday.
Though some analysts expect the Cisco-Sourefire deal to be a catalyst for more M&A activity, traders point out that there have already been some big deals in recent years: Intel (INTC) bought McAfee for nearly $7.7 billion in 2010, while Hewlett-Packard (HPQ) acquired ArcSight for $1.5 billion the same year.
|Facebook suspends Cambridge Analytica co-founder|
|Mark Zuckerberg and Facebook under fire from politicians over data controversy|
|James Comey's book is already a best seller, with Trump's help|
|Your Toys 'R' Us closing questions answered|
|Trump spending spree may speed up the Fed|