Cisco to buy Sourcefire; CapitalSource being sold to PacWest Bancorp

July 23, 2013
ACQUISITIONS
Cisco inks $2.7 billion deal to buy Sourcefire

Sourcefire, the Columbia, Md.-based maker of cybersecurity software, has agreed to be acquired by networking-equipment giant Cisco for $2.7 billion, the firms announced Tuesday.

The acquisition will allow San Jose-based Cisco to provide a greater degree of protection against cyberattacks on computer networks by incorporating Sourcefire’s software, the companies said in a statement.

“Today, the perimeter is vanishing to encompass the mobile network and the cloud, all of which create entry points and an infrastructure that in many cases the IT manager no longer controls,” Chris Young, Cisco’s senior vice president of security and government, said in a conference call about the acquisition.

Sourcefire’s open-source security product Snort “was an important attribute that attracted us to Sourcefire,” Young said. Snort is an intrusion detection and prevention technology with nearly 4 million downloads.

The deal has been approved by both companies’ boards. The acquisition is expected to close later this year pending regulatory approval. Once the deal is complete, Sourcefire employees will become part of the Cisco Security Group.

Founded in 2001, Sourcefire counts more than 650 employees worldwide. The firm went public in 2007 and reported revenue of $223.1 million for 2012.

— Steven Overly and Mohana Ravindranath

CapitalSource being sold to Calif. bank

CapitalSource, a Maryland commercial lender that became a California bank to survive the financial crisis, is being purchased by PacWest Bancorp for $2.3 billion.

The move creates one of the largest commercial banks in California, with more than $15 billion in assets.

Los Angeles-based CapitalSource, which has about 175 employees at its Chevy Chase, Md., office, was founded in 2000 by John Delaney, an entrepreneur now serving as a Democratic member of Congress from Maryland.

CapitalSource was a high-flying finance company that specialized in lending to small and mid-size companies with revenues of $50 million or less. It flourished in the early part of the decade, but was laid low by the financial crisis. Delaney bought an ailing California-based bank because of its easy access to deposits, essentially turning his company into a bank.

CapitalSource’s subsidiary, CapitalSource Bank, has approximately $8.7 billion in assets and 21 branches throughout southern and central California, according to a news release issued as part of the purchase. Pacific Western Bank has $6.7 billion and 75 branches in California. CapitalSource chief executive James J. Pieczynski said he will stay with the new company.

Delaney said in an e-mail that he applauded the strategy of the transaction.

— Thomas Heath

Also in Business

Robert S. Khuzami, the Securities and Exchange Commission’s former head of enforcement, has been hired as a partner in Kirkland & Ellis, the law firm said Tuesday. The announcement ended months of speculation in the legal community over where Khuzami would land. He had been in talks with law firms since leaving the SEC in January.

A Michigan Appeals Court panel on Tuesday halted three lawsuits seeking to derail Detroit’s historic municipal bankruptcy filing. The panel acted after Michigan Attorney General Bill Schuette asked the appeals court to quickly overturn the lower court rulings to halt the filing. Detroit city workers, retirees and pension funds filed lawsuits in state court, concerned that last week’s Chapter 9 bankruptcy filing by Detroit’s state-appointed emergency manager will lead to retirement benefit cuts.

Ford and Toyota ended their partnership to develop hybrid pickup trucks and SUVs after studying the feasibility of such a project for nearly two years, Ford said Tuesday. Ford said it will develop its own rear-wheel drive hybrid system for trucks and SUVs, which will be available by the end of the decade. The two automakers will continue to develop “next-generation” standards for on-board phone, navigation and entertainment systems, the U.S. automaker said in a release.

A Texas man ran a Ponzi scheme through the Bitcoin virtual online money system, securities regulators charged Tuesday, warning that the rise of such digital currencies could lead to more frauds. The Securities and Exchange Commission said Trendon Shavers, 30, of McKinney, Tex., and his company, Bitcoin Savings & Trust, used money from new investors to cover withdrawals by other investors and his own expenses. He raised at least 700,000 Bitcoin, or $4.5 million, from investors in multiple states, the SEC said.

— From news services

Coming Today

10 a.m.: New-home sales for June released.

Earnings: Boeing, Caterpillar, Delta Air Lines, Facebook, Ford, General Dynamics, GlaxoSmithKline, Northrop Grumman, PepsiCo, US Airways Group, Visa.

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