The $225 million proposed deal was considered a major win for both Sourcefire, which was founded only five years ago by the creator of the open-source intrusion-detection system Snort, and Check Point, which looked to grow its line of internal network security products with the acquisition. Check Point would have paid the price in cash and stock and agreed to abide by Sourcefire's option plan. The deal was scheduled to close by the end of next week.

Check Point's decision to pull out of the process is considered a common acknowledgment that CFIUS had been ready to deny approval for the deal, said Peter Kuper, senior security software analyst for investment-research firm MorganStanley. A source familiar with the details of the process confirmed that the companies believed that CFIUS would deny permission for the acquisition. The U.S. Treasury Department would not comment on the issue except to say that CFIUS agreed to the withdrawal of the proposed purchase.

Companies commonly pull out of a pending acquisition before the CFIUS renders its judgment. Of the 14 cases that have not gotten approval after further investigation, only one had actually been denied. The 13 other deals were withdrawn by the companies that had proposed the merger, according to the report published Congressional Research Service.

The scuttled deal hurts Check Point more than Sourcefire, MorganStanley's Kuper said. Check Point is in the process of revamping its business from a company well known for its product defending the corporate network perimeter to offering product for internal network controls as well, he said.

"Sourcefire's business is more about where the dollars are going, and Check Point has been more focused on where the dollars have been," Kuper said.

Sourcefire has maintained profitability, including strong results last quarter, and having the U.S. government rule that its technology is considered a national-security asset does not hurt, he said.

"This wasn't about selling because they had too, it was about them selling because they had the opportunity," Kuper said.

Check Point's stock price dropped $1.01, to $20.01 by mid-day on Friday. The company had announced its pullout from the deal on Thursday night after the market had closed. Symantec, a competitor to Check Point in the network-security industry, is the owner of SecurityFocus.