Zix Takes Aim at Competitors with AppRiver Acquisition

Email security provider Zix plans to double its annual revenue by acquiring AppRiver, the cloud-based cybersecurity and productivity company, for $275 million in cash.

The combined companies creates a cloud-based email security provider to SMBs with more than $180 million in annual recurring revenue, according to Zix. The pairing will significantly expand Zix’s footprint through AppRiver’s numerous and longstanding partnerships, including growing its channel partners from about 400 to more than 4,000, and its customer base from about 20,000 to 80,000.

Zix’s David Wagner

David Wagner, Zix‘s president and CEO, tells us his company looks forward to “harnessing the power of the combined Zix-AppRiver partner networks into one.”

“The result is an industry-leading partner network [and] a best-in-class platform called Nautical,” he said. “With new capabilities, solutions and scale for go-to-market, partners will have opportunities to grow their business[es] and expand their portfolios.”

AppRiver serves more than 60,000 companies globally and is supported by a 4,500-strong MSP reseller community. The company launched its flagship anti-spam and antivirus service in 2002, and has since bolstered its suite of cloud-based security offerings with web protection, email encryption, secure archiving and email continuity solutions.

AppRiver also provides Microsoft Office 365 and Hosted Exchange services, which serve as a lead generation tool for the company’s security offerings.

“We’re the first ones to bring together a platform for cloud email delivery that extends beyond just Microsoft to a broader security and compliance suite,” Wagner said.

The deal will provide a “significant competitive” advantage over other industry players as it positions the combined company as the “only vendor that is bringing together administration of cloud-based email with a robust security feature set surrounding it,” he said.

“Most importantly it further accelerates our offerings into the cloud at the point of initial cloud-application purchase,” Wagner said. “Email is typically the first application that gets moved to the cloud, and this acquisition puts us squarely at the beginning of our customers’ cloud migration. We look forward to capturing more mailboxes and additional services for years to come.”

Zix looks forward to welcoming AppRiver’s partners into its network and delivering new benefits to all as the combined company expands its market presence, he said. With new capabilities, solutions and scale for go-to-market, partners will have opportunities to grow their business and expand their portfolios, he said.

“Existing AppRiver clients will get access to ZixEncrypt and ZixArchive through their existing sign-on and user interface,” Wagner said. “Beginning as early as May 1, new customers will be able to come onto the joint platform and purchase both Office 365 and Hosted Exchange along with their email compliance bundles.”

Zix also announced a $100 million equity commitment from True Wind Capital effective when the acquisition closes. James Greene Jr., True Wind founding partner, and Brandon Van Buren, principal, will join Zix’s board of directors at the closing.

“We believe the combined business presents a transformational opportunity to further extend Zix’s value proposition and go-to-market capabilities, and we look forward to working closely with the leadership team and the board of directors to scale the business to an even higher level of growth and profitability through both organic and inorganic means,” Greene said.