Cisco to Boost Security Advisory Efforts with Neohapsis Buy - Analyst Blog

Networking equipment maker Cisco Systems (CSCO) recently published a blog where it has announced its plans to acquire security advisory firm Neohapsis in a bid to expand its security consulting services.

Cisco expects the acquisition, financial terms of which were not disclosed, to close in the second quarter of fiscal 2015. Neohapsis will be incorporated into Cisco's security services group formed a year ago under the leadership of senior vice president and general manager Bryan Palma.

Per the blog, Neohapsis is a privately held Chicago-based firm which offers security advisory solutions to assess risks, information security levels and compliance issues, along with cloud and mobile security, to its Fortune 500 customers.

The acquisition comes at a time when the Internet security market is evolving rapidly. As cloud computing and mobile devices of various kinds catch on, there is a growing need for secure networks for data transfer and related services. Moreover, enterprises are looking for integrated hardware/software/services solutions to deal with security threats. This is the area that Cisco aims to target with this endeavor.

For several years, Cisco has been trying to expand its security portfolio through in-house development. It has also made several acquisitions such as Sourcefire, Cognitive Security and ThreatGrid to bolster its security services.

Upon the completion of the deal, Cisco will strengthen its position in the network security market and acquire increased exposure to government and corporate customers. The purchase will help Cisco broaden its efforts and meet changing compliance and security needs.

We believe that this acquisition will broaden Cisco's customer base and network offerings, providing the company with a significant competitive edge.

Cisco currently holds a Zacks Rank #3 (Hold). Better ranked stocks in the industry include Emulex Corp. (ELX), sporting a Zacks Rank #1 (Strong Buy), and Allot Communications Ltd. (ALLT) and Ixia (XXIA), both holding a Zacks Rank #2 (Buy).