Zix to Acquire AppRiver for $275 Million

The cloud cybersecurity company AppRiver is set to be purchased by the email encryption, threat protection, and email archiving solution provider Zix for $275 million. An all cash deal was agreed between both firms this week.

Florida-based AppRiver provides email and internet security services such as spam filtering, antivirus protection, email archiving, email encryption, and MS Exchange hosting. The company was formed in 2002 and was one of Microsoft’s original syndication partners for Office 365. The company now has more than 60,000 corporate clients around the globe.

According to Zix, the acquisition of AppRiver is expected to increase its Annual Recurring Revenue (ARR) to around $180 million although Zix is aiming to increase ARR to more than 200 million by the end of the year. The acquisition is expected to increase growth at Zix by between 11% and 15% and overall revenue is expected to more than double this year. The amalgamation of both firms is also expected to result in cost savings of around $8 million.

The majority of the funding for the acquisition is coming from SunTrust Bank and a syndicate of financial institutions. The credit agreement will see Zix provided with a loan of $175 million, a $10 million delayed draw term loan facility, and a $25 million revolving credit facility. Additionally, $100 million has been secured in a convertible preferred equity investment from True Wind Capital. Zix has also expanded its board of directors to 8 with the addition of True Wind Founding Partner James H. Greene, Jr. and True Wind Principal Brandon Van Buren.

“Over the past two years, Zix has been successfully executing on its strategy of becoming a leading provider of email security for compliance,” said David Wagner, Zix CEO. “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 longstanding channel partnerships.”

Author: Richard Anderson

Richard Anderson is the Editor-in-Chief of NetSec.news