Zix Goes Shopping for Messaging Security Tools

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With virus and spam threats putting e-mail security on the front-burner, Dallas-based message protection specialist Zix Corp. on Thursday moved to beef up its product set with a $7 million acquisition of Elron Software.

Zix, which markets software that protects enterprise clients from viruses, spam and electronic attacks, paid $6 million in stock and a $1 million convertible note to complete the acquisition.

The Burlington, Mass.-based Elron, a subsidiary of Elron Electronics Industries of Tel Aviv, Israel, also specializes in anti-spam and anti-virus technology.

With the deal, Zix intends to enhance its protection management offerings by expanding into URL filtering. The transaction includes Elron's flagship Web Inspector filtering and monitoring service that uses rules-based management to create and maintain an enterprise client's usage policies.

Web Inspector features rich reporting capabilities and real-time alerts of policy violations, a key feature in the ongoing battle against malicious virus attacks. Message Inspector, another Elron product included in the deal, also adds to Zix's anti-spam and anti-virus tools and provides an on-location method for protecting against unauthorized inbound, outbound and inter-office communications and virus attacks.

"[With this acquisition] we can now offer secure messaging, content filtering, URL filtering, anti-spam, and anti-virus in a way that best fits the customer's needs -- on-premise, co-sourced, or fully hosted," Zix chief executive John Ryan said in a statement.

He said Zix would continue to focus on providing message security tools to the healthcare industry but the addition of Elron's sales team and distribution channels would push expansion into new verticals. More importantly, the acquisition is expected to add approximately $1.5 million per quarter in new product bookings and maintenance renewals.

Elron's customer base included in the transaction includes big-name firms like 20th Century Fox, Capital Region Healthcare, JFK Medical Center, New Mexico Mortgage Finance Authority, Anheuser Busch Companies, Lucent Technologies and Sony Entertainment.

Founded in 1997, Elron has approximately 37 employees at its Mass. headquarters.

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