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Tuesday, April 04, 2006

Solution Providers Discouraged by Cancelled Merger

Solution providers are disheartened by the announced end of a merger between security vendors Check Point Software Technologies and Sourcefire. The two companies decided to call of their merger at the advice of government regulators last month. Check Point, a company based in Israel and headquartered in California announced their plans to buy Sourcefire, the Snort intrusion-prevention product manufacturer last October. The deal was supposed to be completed in the first quarter of 2006.

The U.S. government was concerned about security during this time related to international acquisitions of companies in their country and suggested to the two companies that there would be significant approval delays for the merger. While Check Point spokespeople stated that they could still legally pursue this particular merger, they have been discouraged enough by the predictions that they are looking for opportunities elsewhere.

Sourcefire intends to build and grow its channel program and revisit existing relationships with partners. Solutions providers are frustrated with the end of this deal, as they now will not be able to add Sourcefire to their list of security options. Snort had the potential to help Check Point and other companies get into a previously unreachable international security market.

The merger cancellation is thought to have been at least in part influenced by the recent problems associated with the Dubai ports deal. The U.S. government has recently been wary of allowing companies with Israeli connections to acquire United States-based companies, particularly those in the security realm. Despite Check Point’s success in U.S. government security projects and its National Security Agency certification, government agencies still prohibit many U.S. companies from using the company’s software.

Blogged By: Computer Consulting Kit