Good news for security software startups. A new prospective buyer has emerged and is armed with $1 billion in cash.

Check Point Software Technologies has long eschewed acquisitions. It made its first acquisition in 2003 when it purchased Zone Labs. It followed suite earlier this year with SourceFire, which fell through due to national security concerns.

But sitting on $1.6 billion in cash in a rapidly consolidating sector, Check Point cut another deal this week. It said it plans to purchase Sweden's Protect Data, maker of Pointsec, for $586 million. After assessing its strategic alternatives during the past few months, the company concluded that data security would be a growing business in the next few years.

And this won't be its last deal. Check Point CFO Eyal Desheh told The Deal that he expected the company to add other data security elements to its portfolio, perhaps through acquisitions. "This is only a first step," Desheh said. "It's a major piece, but we would like to have complete coverage."

For more on Check Point's deal, see:
The Deal
CIO Magazine
Ovum

Tags: checkpoint, check+point, m&a, security, vc, venture capital