"We decided to move on"
Check Point’s Eyal Desheh: We’ll still collaborate with Sourcefire.
Roee Bergman 26 Mar 06 15:46
Israeli software security company Check Point Software Technologies Ltd. (Nasdaq: CHKP) has withdrawn its plan to acquire Sourcefire Inc. of the US. The two companies had signed a contract, under which Check Point was to buy Sourcefire for $225 million. In early March, the US government announced that it was extending its review of the deal.
Check Point had believed that the acquisition of Sourcefire would be completed during the first quarter of 2006, and that it would report a one-time expense of $0.22 per share in 2006 for the acquisition.
Check Point said it was premature to assess the effect on the company’s guidance, and that the company would review its guidance and publish an update.
Responding to the cancellation of the deal, Check Point CFO Eyal Desheh told “Globes”, “We wanted to acquire Sourcefire. That was our goal. The complications raised by the US administration made the process not worthwhile, so we decided to move on.”
“Globes”: Will the cancellation of the deal affect Check Point’s strategic plan?
Desheh: “We have other options, and there are other matters on the company’s horizon. Our talks with Sourcefire established good ties between the companies, and we plan to cooperate with Sourcefire at many levels, which will contribute to both companies.”
The Committee on Foreign Investment in the US (CFIUS) examination was expected to end soon. Wouldn’t it have been better to wait for its recommendation?
“We’ve been working with the US administration on the acquisition for over five months. We applied for approval when we signed the contract, but the handling of the application lasted far longer than we anticipated. At this level of complexity, it was no longer worthwhile to pursue the process.
“There are a limited number of things that can be done simultaneously, and we decided to move on, while cooperating with Sourcefire. A month ago, I said that if the deal did not go through, there were other ways to move the company forward.”
Did you get hints that CFIUS would recommend to the US president to veto the deal?
“Discussions between us and CFIUS are confidential, so I cannot answer your question. We respect the sensitivities of the US administration, especially at this time. We’ll find ways to cooperate with Sourcefire so that both companies and the US administration will all benefit.”
Published by Globes [online], Israel business news - www.globes.co.il - on March 26, 2006
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