Commtouch Acquires eleven GmbH to Accelerate Launch of Security-as-a-Service Solutions

 Commtouch Acquires eleven GmbH to Accelerate Launch of Security-as-a-Service

Conference Call Set for 10:00 a.m. ET on Monday, November 19, 2012

PR Newswire

MCLEAN, Virginia, November 19, 2012

MCLEAN, Virginia, November 19, 2012 /PRNewswire/ --

Commtouch^® (NASDAQ: CTCH), a leading provider of Internet security technology
and cloud-based services, today announced it acquired Berlin, Germany-based
eleven GmbH. The acquisition was completed on Friday, November 16, 2012. 

 (Logo: )

eleven is well-known throughout Germany as the leading provider of mail-based
Security-as-a-Service (SecaaS) solutions, capturing more than 36 percent of
the German market for managed email security. In addition to managed email
security and archiving solutions, eleven also provides advanced on-premise
email solutions and services to selected customers, and its customer base
includes some of the largest organizations in Germany, including BMW, SAP,
Siemens and Deutsche Telekom / T-Online. The acquisition of eleven enables
Commtouch to accelerate delivery of private label cloud-based security
solutions specifically designed for OEM and service provider markets. In
addition, Commtouch's global reach should accelerate sales and adoption of
this leading security technology developed by eleven. 

Commtouch will continue expanding eleven's brand and presence in Germany,
Austria and Switzerland while also supporting the needs of all of eleven's
valued customers, channel partners and distributors through the combined
resources of both companies. Outside of Germany, Commtouch continues to focus
on its primary OEM business and private labeling of cloud based
Security-as-a-Service solutions.

Commtouch will retain the eleven brand in the DACH region. Eleven's 60
employees will remain with the company. Robert Rothe, eleven CEO and founder,
also joins Commtouch's executive team as Chief Technology Officer and head of
Commtouch's operations in Germany.

"eleven's proven cloud-based technology delivers tremendous capabilities that
will accelerate Commtouch's strategy to become a cloud-based
Security-as-a-Service solution provider for the OEM and service provider
markets," said Shlomi Yanai, CEO of Commtouch. "Both the people and the
products at eleven will serve a significant role in our continued effort to
grow Commtouch by offering the most advanced and innovative security
technology. We also look forward to serving all of eleven's current customers
and partners and we are committed to maintaining its leading stance in
Germany. I welcome all of eleven's employees to the Commtouch family and look
forward to the valuable contributions of Robert Rothe in his new role as CTO
at Commtouch."

"I am pleased to join Commtouch as CTO, and I am excited to combine the
resources and great talent in both companies," said Rothe. "Through
Commtouch's acquisition of eleven, there is a tremendous opportunity for
global growth as Commtouch brings eleven's award-winning technology to larger
markets through its extensive base of OEM and service provider partners. We
look forward to continuing great service for our existing customers while also
seeing significant benefit in expanding our opportunities as part of

For the trailing 12-month period ended October 31, 2012, eleven generated
revenues of approximately $8.0 million (€6.3 million) and was profitable.
Similar to Commtouch, eleven generates the vast majority of its revenues from
the delivery of services to its clients on a recurring subscription-based
revenue model. The acquisition of eleven is comprised of three elements: cash,
shares, and an earn-out component based on the success of eleven within the
combined entity. The closing purchase price included net cash of $9.2 million
(€7.2 million) and approximately $2.1 million worth of Commtouch restricted
shares. The earn-out component will be paid out through 2015 based on the
successful achievement of certain performance-based revenue goals.

Financial Guidance

With regard to Commtouch's forward looking financial guidance, based on the
acquisition of eleven announced today, the company's year-to-date results, as
well as the company's current expectations for the remainder of 2012,
Commtouch is updating its outlook. Commtouch is increasing its revenue
guidance and now anticipates full year 2012 revenue will be in the range of
$23.7 million to $23.9 million. The acquisition will be accretive, with a
modest positive contribution for the current fourth quarter of 2012;
accordingly the company is reiterating its expectation that full year 2012
non-GAAP net income is expected to be greater than $4.0 million. 

The above outlook is as of the date of this release, and the company
undertakes no obligation to update its estimates in the future.

Conference Call Information

The company has scheduled a conference call for Monday, November 19, 2012 at
10:00 a.m. ET to review Commtouch's acquisition of eleven GmbH. To participate
in the call, please dial one of the following access numbers 10 minutes prior
to the start time of the call:

US Dial-in Number: 1-877-407-9210
International Dial-in Number: +1-201-689-8049
Israel Dial-in Number: 00-800-4626-6666
10:00 a.m. Eastern Time, 7:00 a.m. Pacific Time,
3:00 p.m. UK Time, 5:00 p.m. Israel Time

The call will be simultaneously webcast live from a link on Commtouch's Web
site at

About eleven

A leading email security provider based in Germany, eleven's unique eXpurgate
technology offers a spam filter and email categorization service that reliably
protects users against spam and phishing, detects potentially dangerous email,
and can distinguish between individual messages and mass emails. eXpurgate
also offers numerous virus protection options and a powerful email firewall.
More than 45,000 organizations of all sizes use eXpurgate to check and
categorize more than a billion email messages every day. Customers include
Internet service providers and telecommunication carriers such as T-Online,
O2, 1&1 and freenet as well as many well-known companies and public
institutions, including Air Berlin, BMW, the Federal Association of German
Banks, DATEV, the Free University of Berlin, Landesbank Berlin, RTL, SAP,
ThyssenKrupp and Tobit Software AG. Visit

About Commtouch

Commtouch^® (NASDAQ: CTCH) is a leading provider of Internet security
technology and cloud-based services for vendors and service providers,
increasing the value and profitability of our customers' solutions by
protecting billions of Internet transactions on a daily basis. With six global
data centers and award-winning, patented technology, Commtouch's email, Web,
and antivirus capabilities easily integrate into our customers' products and
solutions, keeping more than 350 million end users safe. To learn more, visit

  oTwitter: @Commtouch

Use of Non-GAAP Measures

Non-GAAP financial measures consist of GAAP financial measures adjusted to
exclude: share based compensation expenses, amortization and impairment of
acquired intangible assets, deferred taxes, acquisition related costs and
adjustments to earn-out obligations related to acquisitions. The purpose of
such adjustments is to give an indication of the company's performance
exclusive of non-cash charges and other items that are considered by
management to be outside of the company's core operating results. The
company's non-GAAP financial measures are not meant to be considered in
isolation or as a substitute for comparable GAAP measures, and should be read
only in conjunction with the company's consolidated financial statements
prepared in accordance with GAAP. Company management regularly uses
supplemental non-GAAP financial measures internally to understand, manage and
evaluate our business and make operating decisions.

These non-GAAP measures are among the primary factors management uses in
planning for and forecasting future periods. The company believes this
adjustment is useful to investors as a measure of the ongoing performance of
our business. The company believes these non-GAAP financial measures provide
consistent and comparable measures to help investors understand the company's
current and future operating cash flow performance. These non-GAAP financial
measures may differ materially from the non-GAAP financial measures used by
other companies. The presentation of this non-GAAP financial information is
not intended to be considered in isolation or as a substitute for the
financial information prepared and presented in accordance with GAAP.
Management uses both GAAP and non-GAAP measures when evaluating the business
internally and therefore felt it important to make these non-GAAP adjustments
available to investors.

Recurrent Pattern Detection, RPD, Zero-Hour and GlobalView are trademarks, and
Commtouch is a registered trademark of Commtouch. U.S. Patent No. 6,330,590 is
owned by Commtouch. All other trademarks are the property of their respective

This press release contains forward-looking statements, including projections
about our business, within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. For example,
statements in the future tense, and statements including words such as
"expect," "plan," "estimate," "anticipate," or "believe" are forward-looking
statements. These statements are based on information available to us at the
time of the release; we assume no obligation to update any of them. The
statements in this release, including those relating to how eleven's proven
cloud-based system provides tremendous capabilities that will accelerate
Commtouch's launch of a Security-as-a-Service solution for the OEM market, are
not guarantees of future performance and actual results could differ
materially from our current expectations as a result of numerous factors,
including business conditions and growth or deterioration in the Internet
market, commerce and the general economy, both domestic as well as
international; fewer than expected new-partner relationships; competitive
factors, including pricing pressures; technological developments, and products
offered by competitors; the ability of our OEM partners to successfully
penetrate markets with products integrated with Commtouch technology; a slower
than expected acceptance rate forour newerproduct offerings; availability of
qualified staff; and technological difficulties and resource constraints
encountered in developing new products, as well as those risks described in
the text of this press release and the company's Annual Reports on Form 20-F
and reports on Form 6-K, which are available through

Company Contact:
Ron Ela, Chief Financial Officer
(US) +1-650-864-2291 (Int'l) +972-9-8636813

Israel Investor Relations Contact:
Iris Lubitch

U.S.Investor Contact:
Christopher Chu

Commtouch Media Contact:
Matthew Zintel
Zintel Public Relations

SOURCE Commtouch
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