Ironport Systems is announcing Nov. 1 that it will purchase PostX Corporation, an e-mail security and encryption software maker, in an all stock transaction.
When the acquisition is complete, Ironport, which is based in San Bruno, Calif., will begin bundling PostXs software into its Web security and gateway applications to provide greater e-mail encryption and security, the company said in a statement.
The deal calls for an all stock transaction, which will give PostX shareholders 7 percent of IronPorts total stock. The exact dollar amount of the deal was not disclosed. The two companies expect the deal to close in six to eight weeks.
All of PostXs 60 employees will move from their offices in Cupertino, Calif. to Ironports headquarters in San Bruno. Ironport will also continue to support PostXs customers and the PostX brand will still be used.
The latest acquisition is a small part of a larger trend in the security field that has seen large IT companies such as Microsoft, Cisco and EMC buying small companies as their customers demand more security.
While the Ironport acquisition does not compare to the millions Microsoft and IBM have paid for smaller security companies, the move does make sense to Paul Stamp, a senior analyst with Forrester Research in Cambridge, Mass.
By offering a complete application for encrypted and secure e-mail, IronPort can offer its customers a consolidated solution that reduces licensing costs by eliminating one vendor in the chain as well as eliminating administrative hassles for users, Stamp said.
Also, the purchase allows IronPort to gain a better foothold in an area of security—e-mail encryption and security—that has started to become commoditized and has left companies to look to see where they can grow their business and make money.
"This move allows them to still get decent margins," Stamp said.
In addition to the acquisition of PostX, IronPort also announced that it will begin offering improvement to its scanning application suite.
The new application can now open and extract text and meta data from 400 different attachments, including PDF files and Microsoft Office documents.
IronPort will begin offering its new enhancements by late November. IronPort applications that utilize PostX software will ship in the early part of 2007, the company said in its statement.