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Network security firm files for IPO

Network security firm files for IPO
Network security firm files for IPO,0,2605522.story?coll=bal-business-headlines 

By Stacey Hirsh
Sun Reporter
October 26, 2006

Sourcefire Inc., the Columbia network security company that started in 
its founder's living room and has since grown to a 174-person business, 
said yesterday that it plans to go public.

The company - best known for its anti-hacker technology, Snort - filed a 
registration statement late yesterday afternoon with the Securities and 
Exchange Commission for an initial public offering.

"Clearly, it's an important milestone in the company's evolution," Wayne 
Jackson, Sourcefire's chief executive officer, said of the plans to go 
public. He declined to talk about specifics.

Sourcefire has applied to list its common stock on the Nasdaq stock 
market under the ticker symbol FIRE.

The preliminary prospectus filed yesterday did not indicate how many 
shares the company or shareholders planned to sell in its IPO or a price 
range, and it did not indicate how much money shareholders and the 
company are planning to raise.

Sourcefire did say that it plans to use proceeds from the IPO to finance 

Jeffrey W. Englander, an independent analyst who follows the information 
security industry, called Sourcefire's filing a positive step.

Englander was expecting Sourcefire to submit the filing later this year 
or early in the first quarter and said the company's submitting it now 
"indicates they're very confident in how things are going and how the 
future looks."

Sourcefire has grown in size and revenue since it was founded five years 
ago. Revenue has grown from $159,000 in 2001 to $32.9 million last year, 
according to the filing. Sourcefire's revenue was $28.9 million for the 
nine months that ended Sept. 30.

Though the company has never had a profitable year, it reported a net 
income of $205,000 for the third quarter, according to the filing. It 
posted a net loss of $5.5 million in 2005.

Martin Roesch, the company's chief technology officer, started 
Sourcefire in his Eldersburg home in 2001. The company has offices 
around the world, including sales offices in France, Germany and Sweden.

Sourcefire's network security software has become an industry leader. 
Snort, its open-source intrusion-prevention technology, analyzes network 
traffic to protect against hackers.

Sourcefire also makes software to manage that data. The company also 
makes real-time network awareness technology, which maps out exactly 
what the network looks like.

In October last year, Sourcefire made headlines when it announced plans 
to be acquired by Israeli-based Check Point Software Technologies Ltd. 
for $225 million. The acquisition raised national security issues and 
came under investigation by the Committee on Foreign Investment in the 
United States, the same agency that investigated Dubai Ports World's bid 
to run some operations at six U.S. ports including Baltimore's.

Check Point announced in March that it was pulling out of the deal.

In an interview with The Sun shortly after that deal fell through, 
Jackson said Sourcefire had the potential to be a billion-dollar company 
as it grabs a share of markets beyond intrusion prevention.

Sourcefire's investors include a handful of venture capital firms and 
directors and executives of the company, according to the SEC filing. 
Roesch has an 8.4 percent stake in Sourcefire, and Jackson owns 4.4 
percent, according to the SEC document.

The filing shows that Sierra Ventures owns about one-third of 
Sourcefire, New Enterprise Associates about 18 percent, Inflection Point 
Ventures nearly 9 percent, Core Capital Partners 7.6 percent and Sequoia 
Capital 7.5 percent.

Copyright 2006, The Baltimore Sun

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