IBM may have Fortinet in its acquisition sights

Citing two people with "knowledge of the situation", the newswire says that Fortinet is currently working with Morgan Stanley and exploring its strategic options.

"Discussions with IBM may be at an advanced stage, one person said, though a deal could still unravel. Fortinet rose 6.3% in Nasdaq Stock Market trading. A Fortinet representative said there are no talks with IBM and declined to comment on whether IBM made an approach or whether any talks were held", said the newswire.

The reports come in the wake of Fortinet – which is worth in excess of $2.0bn – floating on the Nasdaq stock exchange last year, since when it has become a lot more open about its plans for the future, Infosecurity notes.

As reported earlier this year, at a reseller briefing in Birmingham (UK) this summer, Darren Turnbull, Fortinet's vice president of Strategic Solutions, said that the company's planned new products will include enhanced FortiASIC Security Processing technology, a hardware technology, which will bring high-end security to lower-end users.

Central to the new budget range will be a high-performance firewall, delivered as a system on a chip technology that is unique to this sector of the market, he said.

According to overnight news reports speculating on the possible acquisition, various wires note that Sam Palmisano, IBM's CEO, has gone on record as saying he plans to spend around $20 million on acquisitions over the next five years.

This extrapolates out at approximately two Fortify acquisitions each year, if you do the math, Infosecurity notes.

Fortinet has asked Bloomberg to correct and retract the news item. The company said Bloomberg cited its sources incorrectly, and that “investors need to be aware of the error”, adding that “it is focused on building a strong independent company and is not in acquisition discussions with IBM”.

The Bloomberg newswire, meanwhile, quotes Charles King, a principal analyst from Pund-IT in California, as saying that Fortinet's focus on enterprises, services providers and government entities maps particularly well against IBM's existing client base.

It should, he observed, help broaden IBM's solution set and appeal in new and emerging markets.

King told the financial newswire that Fortinet "would give potential suitors an immediate leadership position in the increasingly business-critical threat-management market."

Bloomberg notes that Fortinet was co-founded in 2000 by its current CEO Ken Xie, who previously started and ran NetScreen Technologies, a company that was acquired in 2004 by Juniper Networks for around $3bn.

IBM and Fortinet are not commenting on the speculation, Infosecurity understands.

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