Cisco Nets NetSift for $30M

This is a good time to be a network security startup. Cisco Systems Inc. (Nasdaq: CSCO) is spending its money on yet another security company that's barely out of its diapers (see Cisco Pays $30M for NetSift ).

Just a week after announcing the acquisition of eight-month-old M.I. Secure Corp. for $13 million, Cisco says it's paying $30 million in cash and stock options for NetSift Inc., a company just a year old and with 15 on staff (and, currently, a blank Website).

The deal is expected to close by the end of July, when NetSift, originally backed by Enterprise Partners Venture Capital, will become part of Cisco's Internet Systems Business Unit (see Cisco Buys Startup for $1.2M per Employee).

And in case your calculator's not working, that values NetSift, which is developing technology to automatically protect enterprise networks against new worm and virus attacks by generating unique signatures, at $2 million per employee. KACHINGGG!!!!

Among those 15 is at least one person with a track record of starting a company bought by Cisco. Board member Guru Parulkar founded switching fabric startup Growth Networks in 1998 and joined Cisco when his company was acquired by the routing giant in February 2000 for about $355 million in stock. He left in July 2001 to join the VC firm, New Enterprise Associates (NEA).This is Cisco's third security-related acquisition this year, with FineGround Networks making up the trio with M.I. Secure and NetSift (see Cisco Chomps FineGround). Altogether, Cisco has announced seven acquisitions in 2005, the other firms being Sipura Technology Inc., Topspin Communications Inc., Airespace Inc., and chip firm Vihana Inc., another $30 million acquisition (see Cisco/Linksys Buys VOIP ATA Maker, Cisco Buys Topspin for $250M, and Cisco Buys Airespace).

Ray Le Maistre, International News Editor, Light Reading