The acquisition is expected to enable OpenText to gain 5,600 managed service partners and extend its partnership with Microsoft
The deal is expected to boost its OpenText’s cloud revenues. (Credit: Gerd Altmann from Pixabay)
Canadian software company OpenText has signed an agreement to acquire email encryption solutions provider Zix for $860m.
Zix offers SaaS-based email encryption, threat protection and compliance cloud solutions for small and medium-sized businesses (SMBs).
The acquisition is expected to enable OpenText to gain 5,600 managed service partners and extend its partnership with Microsoft.
It is also anticipated to allow the company to boost its SMB platform with cloud-based email security and compliance solutions.
Under the terms of the agreement, OpenText, through a wholly owned subsidiary, will begin the tender offer for all outstanding shares of Zix common stock at a price of $8.50 per share in cash.
OpenText CEO and CTO Mark Barrenechea said: “Zix will deepen our technology and go-to-market relationship with Microsoft.
“Further, Zix will bring approximately 5,600 MSPs to OpenText, and create significant cross-sell opportunities in the OpenText and Zix clouds. Today’s announcement demonstrates our commitment to winning in both the Enterprise and SMB markets.”
OpenText intends to fund the acquisition with existing cash on hand. The deal is expected to boost its cloud revenues.
The transaction is expected to be completed within the next 90 days.
Upon completion, OpenText will combine Carbonite, Webroot and Zix products to create a powerhouse SMB platform for data protection, threat management, email security and compliance solutions.
In December 2019, the company acquired Carbonite, a provider of cloud-based subscription data protection, backup, disaster recovery and endpoint security to SMB businesses.
Carbonite acquired Webroot, a cybersecurity provider for managed service providers and small businesses, in March that year.
OpenText EVP and CFO Madhu Ranganathan said: “The acquisition of Carbonite in December 2019 and its successful integration has given us the confidence and readiness to expand even further into the SMB market.
“Zix brings a meaningful addition to our cloud revenues and will be immediately accretive to our adjusted EBITDA. Once integrated, we expect Zix to contribute to organic growth in cloud and Annual Recurring Revenues, be on the OpenText operating model for profitability and meet our cash-based returns criteria.
“We remain committed to maintaining a healthy balance sheet, delivering strong earnings, and continuing to invest in our organic growth initiatives.”