CAMPBELL, Calif. - (Business Wire) Barracuda Networks Inc., the worldwide leader in email and Web security appliances, today announced that it has made a proposal to the Board of Directors of Open source innovator and SNORT
® creator, Sourcefire Inc. (Nasdaq:FIRE), to acquire all of the outstanding shares of common stock for $7.50 per share in cash. This proposal represents a 13 percent premium above the closing price of Sourcefire common stock on May 23, 2008. The proposal also represents a 34 percent premium over the enterprise value as of May 23, 2008 and a 16 percent premium over the average trading stock price for Sourcefire over the last 60 trading days (46 percent on an enterprise value basis).
“We hope to work together with Sourcefire and its board of directors to negotiate a mutually beneficial agreement for our respective stakeholders,” said Dean Drako, Barracuda Networks President and CEO. “Barracuda Networks is uniquely positioned to address the challenges that have impacted the company’s performance and stock price. We believe there are strong philosophical compatibilities between Barracuda Networks and Sourcefire and this offer reinforces our dedication to continuing the advancement and protection of open source projects worldwide.”
Barracuda Networks’ proposal reflects its ongoing commitment to protect the open source community and the free and open source Clam AntiVirus software from patent threats similar to the one posed by Trend Micro against Barracuda Networks earlier this year.
“Sourcefire has made very powerful contributions to open source efforts worldwide through its acquisition of ClamAV and its continued development of SNORT, the de facto Intrusion Detection and Prevention technology,” said Drako. “The combined company will be a more effective and profitable competitor with the ability to better meet the evolving demands of the market.”
In light of the compelling reasons for a combination of Barracuda Networks and Sourcefire, and the importance of allowing the companies’ respective shareholders to capitalize on the benefits of the proposed transaction sooner rather than later, Barracuda Networks is publicly releasing the following letter sent to the Sourcefire Board of Directors earlier this week so that both companies’ stakeholders will have the opportunity to fully assess this unique proposal:
May 27, 2008
| Wayne Jackson, CEO The Board of Directors Sourcefire, Inc. 9770 Patuxent Woods Drive Columbia, MD 21046 |
Dear Wayne:
Barracuda Networks, Inc. is proposing to acquire all of the outstanding shares of FIRE’s common stock for $7.50 per share in cash. This represents a 13% premium to Friday’s closing share price and, given that over half of the Company’s market capitalization is reflected in its net cash position, is a 34% premium to FIRE’s enterprise value (market value less cash). This is also a 16% premium to the trailing 60-day closing price (46% on an enterprise value basis).
Our board of directors supports a combination with FIRE. We do not expect any financing contingencies or extensive regulatory hurdles to completing this transaction. Our proposal is conditioned on satisfactory completion of a due diligence investigation, which we believe can be completed expeditiously.
The benefits of our proposed transaction are very compelling and offer significantly more security to FIRE stockholders, creditors, suppliers and partners than FIRE on a standalone basis. Equally important, this transaction provides additional opportunities for employees. We believe that the recent FIRE stock price reflects the execution challenges faced by the company’s management to date. We also feel that the company’s inaction in dealing with looming threat of litigation from Trend Micro has had an effect on the stock price, although we feel that the impact has not been fully priced into the FIRE stock. Barracuda Networks is uniquely positioned to address and remedy both of these conditions and this therefore creates an opportunity for FIRE shareholders to both preserve and create value.
We and our advisors are ready to commence due diligence and to negotiate definitive documentation immediately, and request that you agree to work with us. We are prepared to meet with you or FIRE’s Board to achieve this outcome. I believe we owe it to our respective stakeholders to pursue this opportunity vigorously.
This letter is not intended to create or constitute any legally binding obligation, liability or commitment by us regarding the proposed transaction and there will be no legally binding contract or agreement between us unless and until a definitive agreement is executed.
I look forward to hearing from you soon.
Respectfully,
| Dean Drako |
| President and CEO |
| Barracuda Networks, Inc |
Barracuda Networks Inc.
Kylie Heintz, 408-342-5440
kheintz@barracuda.com
