UK antivirus company, Sophos, has bought Canadian company ActiveState for $US23 million in cash, adding ActiveState's line of antispam products to Sophos' enterprise antivirus software.
The deal will strengthen the position of both companies, which faced stiff competition for business customers from major antivirus vendors selling integrated antispam and antivirus products, industry experts say.
Based in Vancouver, British Columbia, ActiveState is a six-year-old, privately-held company that made a name for itself selling software development tools for open source languages before moving into the content filtering arena, according to Steve Munford, president and chief executive officer of ActiveState.
The deal comes after the two companies formed a working relationship six months ago to co-operate in selling their technologies into large corporate accounts, president of Sophos' US operations, Steve Orenberg, said.
ActiveState products complement Sophos' software and the companies had similar customer bases, focusing almost exclusively on enterprises and business customers, rather than consumers, he said.
ActiveState's PureMessage antispam gateway analyses email messages to detect spam and also has content inspection features that allow companies to set and enforce corporate policies for message content.
Sophos initially would support PureMessage along with its own gateway mail product, MailMonitor. The two products will be merged some time in 2004, Orenberg said.
Sophos also would continue to support ActiveState's development tools business indefinitely under the ActiveState brand, Orenberg said.
Though not core to Sophos' business model, ActiveState's programming tools and languages business provided a deep well of development experience within the company that could contribute to filtering and antivirus tools, he said.
The ActiveState products also had a loyal customer base within Fortune 1000 companies that Sophos hoped would serve as a calling card for the company's antivirus and antispam products, Orenberg said.
Development of the PureMessage product would continue in Vancouver and ActiveState's 104-person staff would be absorbed into Sophos, a company spokesperson said.
ActiveState's sales organisation would become a North American West Coast sales force for the company, Munford said.
He will take a position as Sophos' global vice-president of messaging and head up the company's integration efforts, he said.
For Sophos, the decision to expand into antispam was inevitable, IDC's Brian Burke said.
In addition to strengthening Sophos product offerings, the ActiveState purchase added more generic content filtering technology to Sophos' product line, which would serve the company well with customers looking for help in areas such as email content security and compliance with regulations once the spam wave had passed, Burke said.