Cisco to acquire ScanSafe for $183 million

Armed with $29 billion in reserves Cisco Systems is proposing to make its third acquisition this month by offering to buy web-security firm ScanSafe for $183 million to expand in the fast-growing web-security market that is expected to grow to $2.3 billion by 2012.

ScanSafe, founded in 2004, a privately held company headquartered in London and San Francisco, recognising that the changing face of the Internet would require more effective Web security than existing solutions could offer, was the first company in the world to offer Web security via a SaaS model.

The SaaS model provides customers a solution that would require less maintenance, be more cost-efficient and could protect users from the new, more sophisticated threats that comes with Web 2.0.

Under the terms of the deal, Cisco will pay approximately $183 million in cash and retention-based incentives. The acquisition is subject to various standard closing conditions and is expected to close in the second quarter of Cisco's fiscal year 2010, said San Francisco-based Cisco.

By acquiring ScanSafe, Cisco is building on its successful acquisition of leading on-premise content security provider IronPort. The acquisition brings together the Cisco IronPort high-performance Web security appliance and ScanSafe's leading SaaS Web security service.

This combination will expand Cisco's security portfolio to offer superior on-premise, hosted, and hybrid-hosted Web security solutions.