Check Point, Sourcefire Call Off Merger

The two companies late last month agreed to withdraw from the deal, and there are no plans to resurrect it, according to Michele Perry, chief marketing officer at Columbia, Md.-based Sourcefire.

Check Point, an Israel-based company with U.S. headquarters in Redwood City, Calif., last October announced plans to buy Sourcefire, maker of Snort intrusion-prevention products. The $225 million deal was expected to close in the first quarter.

The companies decided to drop the deal in light of the U.S. government’s security concerns over international acquisitions of U.S. companies and associated delays in the complex approval process by the Committee on Foreign Investment in the United States (CFIUS), Perry said. The CFIUS consists of 12 government agencies, Check Point said on its Web site. “We can still pursue the acquisition, but at this point we will explore other opportunities,” Check Point said in a statement.

Sourcefire will continue to develop its channel program and build on relationships the company already had begun to forge with Check Point partners, Perry said.

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Some solution providers lamented the scuttling of the deal.

“Not being able to add Sourcefire is a huge disappointment for us,” said Brian Haboush, vice president of business development at Intelligent Connections, a Royal Oak, Mich.-based solution provider. “Snort would have helped Check Point leapfrog into the internal security side of the market they have been trying to reach.”

Bill Calderwood, president of The Root Group, a Boulder, Colo.-based Check Point partner, said he also was looking forward to adding the Sourcefire product line to his lineup. The recent controversy over the Dubai ports deal probably had an influence on the companies’ decision to scrap their merger, he noted.

“It could have to do with sensitivity in the U.S. government over allowing a company with Israeli connections to acquire a U.S. security firm,” Calderwood said. Still, Check Point has had success in U.S. government security projects, he added. Haboush said government contractors have told him they are strictly prohibited from using Check Point software, which he said is surprising in light of the fact that Check Point has National Security Agency certification.