Check Point Aborts Sourcefire Acquisition

Facing intense pressure from U.S. government investigators, Israeli security company Check Point Software Technologies has aborted its acquisition of Sourcefire.

Less than six months after announcing plans to shell out $225 in cash and stock to purchase Sourcefire, Check Point pulled out of the deal, citing "lengthy ongoing delays" in a U.S. government investigation and "the current climate for international acquisition."

Officials from both sides declined to discuss the latest twist in a story that closely mirrors the political controversy over foreign management of U.S. ports.

Check Point, which has dual headquarters in Ramat Gan, Israel, and Redwood City, Calif., is a big-name vendor of network security, firewall and VPN technologies. The Sourcefire deal raised eyebrows because it included the Snort IPS (intrusion prevention system) technology, which is used extensively by U.S. government departments.

According to published reports, both the FBI and Department of Defense objected to the sale of the Sourcefire technology to an Israeli company, prompting an investigation by the CFIUS (Committee on Foreign Investment in the United States), a U.S. interagency committee that is chaired by the U.S. Treasury.

The CFIUS elected to conduct a 45-day examination of the acquisition to satisfy national security concerns.

As it turned out, the CFIUS investigation was not yet complete when the announcement came that the deal was dead.

"Check Point and Sourcefire withdrew their application after carefully considering the complexities of the CFIUS process, the lengthy ongoing delays in the CFIUS process, and the current climate for international acquisition," a spokesperson said.

Analysts described the merger collapse as "a negative event for both companies."

Gartner Research vice president Greg Young said: "This was a very good fit between Check Point and Sourcefire. Its a big blow that they could not get it completed."

Check out eWEEK.coms for the latest security news, reviews and analysis. And for insights on security coverage around the Web, take a look at eWEEK.com Security Center Editor Larry Seltzers Weblog.