Cisco Systems, Inc. (CSCO) Finally Makes a Smart Deal Again

Nobody seems to expect another round of consolidation in the space. Fortinet Inc (NASDAQ:FTNT) has gained 4.8% today, but other data security experts have stayed flat or traded down. Fortinet always looked like a reasonable takeout target, particularly since the company parted ways with longtime CFO Ken Goldman last year. The Sourcefire deal paints a slightly larger target on Fortinet Inc (NASDAQ:FTNT)’s back, but you have to wonder who would be able to pay a buyout premium on top of Fortinet Inc (NASDAQ:FTNT)’s $3.5 billion market cap. Most of the big boys have already picked their positions in the security space, to the point where even Intel has jumped into the game.

As for Cisco, it’s refreshing to see the company making a splash in all the right pools. This deal makes a lot more sense than the 2012 ventures into wireless networking and media software. Sourcefire, Inc. (NASDAQ:FIRE)’s focus aligns with Cisco Systems, Inc. (NASDAQ:CSCO)’s core strengths and makes the company stronger where it counts. Cisco is already hard to beat in the enterprise networking market, and this deal pumps steroids into the giant’s hardest-working muscles.

This is how Cisco Systems, Inc. (NASDAQ:CSCO) at last earns its Dow membership, and it’s why I have a bullish CAPScall on Cisco Systems, Inc. (NASDAQ:CSCO) shares. It’s all about business-class networking.

The article Cisco Finally Makes a Smart Deal Again originally appeared on Fool.com.

Fool contributor Anders Bylund owns shares of Intel, but he holds no other position in any company mentioned.

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