Sourcefire rejects unsolicited takeover bid from Barracuda
Barracuda said on Thursday it wanted to purchase Sourcefire, creator of the SNORT intrusion detection and prevention software, for a 13% premium on its 23 May share price.
But Sourcefire hastily rejected the $187m bid, arguing that the offer "substantially undervalues" the company.
Barracuda claimed the deal should proceed because it would help to protect users of the Clam anti-virus software. The company faced a patent complaint from rival manufacturer Trend Micro last year where Trend demanded that Barracuda remove virus detection technology, which was based on Clam AV, from its products.
ClamAV has been owned by Sourcefire since last year.
"Barracuda Networks' proposal reflects its ongoing commitment to protect the open source community and the free and open source Clam anti-virus software from patents threats similar to the one posed by Trend Micro against Barracuda Networks last year," said Barracuda in a statement.
Barracuda CEO Dean Drako added that there were "strong philosophical compatibilities" between Barracuda and Sourcefire.
Sourcefire has been through some mixed fortunes in the last three months. Its revenues have been growing substantially - up 31% year-on-year in its latest results - but its costs have also been rising, resulting in a net quarterly loss of $3.5million.
Last month its founder and chief technology officer Martin Roesch was shortlisted as a finalist for Ernst & Young's Enterpreneur of the Year award, while SNORT was recognised as Best Network Security product at the SC Magazine Awards 2008 Europe in April. The company has also been trying to expand its channel programme this side of the Atlantic.
Sourcefire's rejection of Barracuda's approach is not the first time controversy has surrounded the company. Sourcefire's planned merger with Tel Aviv-headquartered CheckPoint three years ago was abandoned amid US Government concerns that using Israeli software might jeopardise the security of its systems.