Posted in Business

Appriver sold again

   December 27, 2021

OpenText™ (NASDAQ: OTEX), (TSX: OTEX) last week. announced that it has completed the closing of the previously announced acquisition of Zix Corporation (NASDAQ: ZIXI) (“Zix”), a leader in SaaS-based email encryption, threat protection and compliance cloud solutions for small and medium-sized businesses. In 2019, Zix purchased Appriver – the leading provider of cloud-based cybersecurity solutions based in Gulf Breeze, for $275 million in cash.

OpenText logo (PRNewsfoto/Open Text Corporation) (PRNewsfoto/Open Text Corporation)

“I would like to welcome Zix customers, partners, and employees to OpenText. Combined, we will be able to provide our customers a powerhouse SMB platform for data protection, threat management, email security and compliance solutions,” said OpenText CEO & CTO Mark J. Barrenechea. “Zix meaningfully expands our distribution capabilities with MSP partners, enhances our SMB offering and deepens our go-to-market relationship with Microsoft.”

Barrenechea further added, “OpenText is committed to winning Information Management in both the Enterprise and SMB markets.  We are targeting for Zix to be on our operating model within 12-18 months and as previously highlighted, once integrated, we expect Zix to be accretive to organic growth and margin dollars.”

Preliminary Financial Overview

OpenText expects no material revenue or operating expenses from Zix over the holiday season between December 23rd and 31st, within the current quarter (Fiscal 2022 Q2). Further financial projections from OpenText, as well as updated target models, will be provided when the company reports its second quarter Fiscal 2022 financial & business results.(1)

Terms of the Acquisition

  • The tender offer for all outstanding Zix common stock (including shares of common stock issued upon conversion of Zix’s Series A Preferred Stock) for $8.50 per share in cash is now complete and Zix is now a wholly-owned subsidiary of OpenText
  • Total purchase price of approximately $860 million, inclusive of Zix’s cash and debt
  • The total purchase price is approximately 3.5x TTM (Trailing Twelve Months) Zix GAAP revenues (as of September 30, 2021)
  • Zix Reported Annual Recurring Revenues (ARR) of 90%
  • Accretive and expected to be on the OpenText operating model within 12-18 months
  • Funded with OpenText’s existing cash on hand

(1)  Upon closing, Zix’s resell business will be reported on a “net” basis to conform to OpenText’s revenue recognition policies. The net basis recognition will result in Zix’s immediate conformance to OpenText Gross Margin Model.

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