Cisco buy Psionic for IDS skills

ClearResponse

Cisco Systems Inc is expanding its presence in the network security software space with the acquisition of small, privately held intrusion-detection software (IDS) vendor Psionic Software Inc.

San Jose, California-based Cisco is acquiring Austin, Texas-based Psionic to boost the efficiency of its existing network-based IDS technologies. Founded in January, 2000 Psionic produces the ClearResponse intrusion management system, which works with existing IDS software to validate potential security breaches and reduce false alarms through the use of patented adaptive scanning techniques.

Cisco is planning to integrate Psionic's software with its own IDS products to improve the performance of its network security technologies. Psionic's eight employees will join the Cisco VPN Security Services business unit under the direction of general manager Richard Palmer.

Under the terms of the agreement, Cisco will exchange common stock worth $12 for all outstanding shares and options of Psionic. The deal has been approved by both company's boards and is due to close in the second quarter of Cisco's fiscal 2003 (ending January 25). Cisco is expecting to take a nominal one-time charge for purchased in-process research and development expenses.

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