The Marriage Of Two Security Companies: Zix Acquires AppRiver
The New Year marriage of two security firms took place, as Zix, an email security consulting firm announced the acquisition of AppRiver, a cloud-based cybersecurity vendor to the tune of $275 million, an all-cash transaction purchase. With the acquisition, Zix is estimated to reach their target profit of $180 million, with the target revenue is seen growing from 11% to 15% for the fiscal year 2019.
Founded in 2002, AppRiver’s business model is to provide subscription services for email and IT security tools. They are in the business of antispam and antimalware, encryption technology, Exchange server hosting and archiving technology. AppRiver is also a Microsoft certified partner for Office 365 and Windows servers, one of the companies that help host more than 60,000 clients of Microsoft technology globally.
In the early stages of the acquisition, Zix will be able to save $8 million due to a more efficient corporate structure for the next one and the half years after the acquisition. Part of completing the deal is Zix’s loan of $175 million, plus $25 million in structured credit from Keybanc Capital Markets and SunTrust Bank. Zix also released $65 million Series A preferred stocks for True Wind Capital to close the deal.
AppRiver’s key people like Brandon Van Buren and James Greene will be part of Zix board of directors once the agreement is in force. “From a cross-selling standpoint, the acquisition provides attractive and abundant synergies at the onset. Over the past two years, Zix has been successfully executing on its strategy of becoming a leading provider of email security for compliance. The acquisition helps us expand our customer base, enhance our advanced threat protection position, and accelerate our high-velocity go-to-market strategy through AppRiver’s numerous and long-standing channel partnerships,” explained David Wagner, Zix CEO.
True Wind Capital, the current mother firm of AppRiver will also add $100 million in investment for the acquisition in order to usher a strong start for the latter under the Zix brand. Acquisition of this kind is nothing new in the industry, recently the tech giant Akamai bought an access control security startup vendor, Janrain. With the purchase, Akamai hopes to tap the technology in order to strengthen its portfolio. Radware, a mainstream DDoS Firewall vendor is also trying to acquire ShieldSquare, an automation management vendor.
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Kevin Jones, Ph.D., is a research associate and a Cyber Security Author with experience in Penetration Testing, Vulnerability Assessments, Monitoring solutions, Surveillance and Offensive technologies etc. Currently, he is a freelance writer on latest security news and other happenings. He has authored numerous articles and exploits which can be found on popular sites like hackercombat.com and others.