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February 9, 2006

SonicWall buys Mail Frontier

Mail Frontier, the company which was running full page NewsWeek and CNN ads with their venture capital have sold themselves for peanuts. With $24.5M in, I gaurantee you the VCs are not happy with a $31M price. With preferences I bet the common shareholders got nothing.

Publicly Traded Security Co. SonicWALL Buys MailFrontier For $31M In Cash

By VentureWire Staff Reporters

In its third acquisition in as many months, publicly traded SonicWALL Inc. said that it will buy email security start-up MailFrontier Inc. for $31 million in cash.SonicWALL, which designs, develops and manufactures a host of network security products, broadened its reach late last year with the acquisitions of Lasso Logic Inc., a continuous data protection start-up, and the assets of enKoo, a remote access company. The November 2005 deals were valued at a combined $20 million.By acquiring MailFrontier, the company adds software and appliances designed to protect against inbound and outbound email threats - including spam, viruses and phishing - and to provide policy enforcement and control to simplify regulatory compliance efforts.Formed in 2002, MailFrontier pulled in about $8 million in revenue last year, said SonicWALL Chief Executive Matt Medeiros. MainFrontier customers include OfficeMax Inc., CNN LP, 7-Eleven Inc., SAP AG and Callaway Golf Co. With its revenue on the upswing, MailFrontier planned to reach profitability by early this year, said Chief Executive Anne Bonaparte. But the company lacked the resources to fully expand its channel partnerships. "We are dong well, and have been getting all sorts of kudos, but what we always lacked - and which is pretty tough for a small company - is that channel leverage we needed going after the mid-enterprise market," said Bonaparte.SonicWaLL plans to integrate the company's email protection products into its broader offerings. SonicWALL will also gear the MailFrontier products toward the small and medium-sized business markets, where SonicWall has a strong foothold.The majority of MailFrontier's 70 employees will join Sunnyvale, Calif.-based SonicWALL. Bonaparte and Founder and Chief Technology Officer Brian Wilson will hold leadership roles at SonicWALL, though their titles are not yet defined.Palo Alto, Calif.-based MailFrontier raised about $24.5 million across four rounds from investors including Draper Fisher Jurvetson, Menlo Ventures and New Enterprise Associates. The acquisition is expected to close by the end of the month, said Medeiros. http://www.sonicwall.com http://www.mailfrontier.com

Posted by Martin at February 9, 2006 11:16 AM

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