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Proofpoint Buys Sendmail for $23M Cash

Proofpoint Inc. said on Wednesday it has acquired Sendmail Inc. for $23 million in cash.

Proofpoint, which sells through channel partners, specializes in enterprise email security; Sendmail routes email among servers using SMTP. The companies already worked together, as Proofpoint built its Enterprise Protection product on Sendmail technology. 

Now, Proofpoint is acquiring Sendmail and its employees. Proofpoint CEO Gary Steele said in a prepared statement that the company will work with Sendmail’s enterprise customers, deploying cloud-based security platforms such as Proofpoint’s Targeted Attack Protection.

Proofpoint said the Sendmail acquisition won’t hurts its fourth-quarter 2013 revenue. However, Proofpoint does project a wider net loss of about $2 million as it takes on more employees and begins to build a recurring revenue stream. Next year, Proofpoint forecasts that Sendmail will contribute about $5 million in revenue, half of which will come from contract renewals and the other half from new sales of Proofpoint platforms to existing customers.

On the other hand, sales of Sendmail solutions to new customers is difficult to estimate, Proofpoint said. The company said it expects little or no legacy business to be sold in the form of perpetual licenses or hardware sales.

 

 


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