Tech Trader Daily : Cisco Gets Warm Reception For IronPort Deal

"More than that, investors seem enthused about Cisco’s determination to expand its offerings in the security sector.
Prudential’s Inder Singh noted in a research note today that IronPort holds 9% of the market for secure content management appliances, and 12.5% of the market for messaging security appliances. (By appliances, he means basically specialized servers.) He also notes that IronPort recently acquired PostX, a company which provides email encryption technology, and partners with Vontu, a data leakage prevention company. “We believe Cisco’s move strengthens its security portfolio, and integrating IronPort technologies raises the competitive pressure against other messaging security vendors such as Symantec (SYMC) and CipherTrust,” a unit of Secure Computing (SCUR)."

"Bill Choi, an analyst with Jefferies & Co., estimates that IronPort’s last 12 months revenue topped $100 million, while growing more than 50% quarter-over-quarter. As Merrill Lynch’s Tal Liani points out, that makes the deal look pretty expensive, at more than 6x expected 2007 sales, assuming a growth rate this year or more than 40%. On the other hand, Liani notes, Merrill expects the security gateway market to grow 36% compounded through 2009, supporting “a premium valuation.”