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Proofpoint, Inc. Acquires Sendmail, Inc.

Proofpoint, Inc. Acquires Sendmail, Inc. 
Industry-Standard MTA Technology Bolsters Proofpoint's Leading
Position in Enterprise Security and Messaging 
SUNNYVALE, CA -- (Marketwired) -- 10/01/13 --  Proofpoint, Inc.,
(NASDAQ: PFPT), a leading security-as-a-service provider, today
announced that it has acquired Silicon Valley based Sendmail, Inc., a
leading provider of solutions that simplify business messaging
complexity and reduce IT infrastructure costs for enterprises
throughout the world. The acquisition brings a unique set of
technical talent to the Proofpoint engineering team and strengthens
the company's position in enterprise security and messaging. Under
the terms of the merger agreement, Proofpoint paid approximately
$23.0 million in cash. The acquisition was structured as a
simultaneous signing and closing and requires no additional
approvals. 
"The foundation of the Proofpoint Enterprise Protection(TM) solution
is built on the Sendmail Messaging Transfer Agent (MTA)," said
Proofpoint CEO Gary Steele. "Over the many years of its operation,
Sendmail has established itself as a leading provider of critical
messaging infrastructure throughout the world, both for cloud
deployments as well as legacy on-premise solutions. Acquiring
Sendmail gives Proofpoint ownership of this definitive
industry-standard technology, enabling us to further optimize the
solution to meet the evolving demands of public and private cloud
architectures and their associated security requirements. We are
thrilled to welcome the extraordinary team that built this technology
as the newest members of Proofpoint's exceptional team of technical
talent, and we look forward to working with Sendmail's enterprise
customers to help them meet the challenges of the evolving security
threat landscape through deployment of Proofpoint's Targeted Attack
Protection(TM) and our other cloud-based security solutions." 
The Sendmail MTA holds a distinguished place in the Internet's
history as the first broadly distributed MTA platform supporting
simple mail transfer protocol (SMTP). To this day, the Sendmail MTA
-- as a commercial product and in its open source version -- is
widely used for intranet and Internet messaging. Through this
acquisition, Proofpoint plans to further enhance the Sentrion(TM) MTA
platform wh
ile also continuing to maintain the open source
distribution. 
Sendmail brings a global community of open source users and a
compelling set of enterprise customers, but little in the way of
near-term recurring revenue due to their legacy business model built
around the sale of appliances and perpetual licenses. Proofpoint
believes that there is a compelling opportunity to better service
these customers by continuing to support the open source distribution
while moving to a subscription-based model for the proprietary
Sentrion version of the platform. We expect this new
subscription-based approach to further extend the ongoing
proliferation of the Sendmail solution to both new and existing
customers while also creating an opportunity to sell Proofpoint's
world-class Security, Archiving and Governance solutions to
Sendmail's installed base of enterprise customers. 
For the fourth quarter of 2013, Proofpoint expects Sendmail to have
an immaterial impact on revenue while widening the company's non-GAAP
net loss by approximately $2 million or $0.06 per share, as the
company takes on the costs associated with this new team and begins
to build a recurring revenue stream.  
For full year of 2014, the company currently expects Sendmail to
contribute approximately $5.0 million in revenue, half of which is
from the renewal of legacy maintenance contracts, and the other half
being new sales of Proofpoint solutions to these existing customers.
Non-GAAP net loss is expected to be impacted by approximately $3
million or $0.08 per share during 2014, with losses during the first
half of the year partially offset by expected accretion by the end of
the year. Management will provide initial full year 2014 guidance,
including the expected financial impact of Sendmail, when it
announces third quarter 2013 financial results later this month. 
Note that the ongoing sale of the Sendmail solutions to new customers
is difficult to estimate at this time and as such is not included in
this guidance, and little or no legacy business is expected to be
sold in the form of perpetual licenses or hardware sales. 
About Proofpoint, Inc.
 Proofpoint Inc. (NASDAQ: PFPT) is a leading
security-as-a-service provider that focuses on cloud-based solutions
for threat protection, compliance, archiving & governance, and secure
communications. Organizations around the world depend on Proofpoint's
expertise, patented technologies and on-demand delivery system to
protect against phishing, malware and spam, safeguard privacy,
encrypt sensitive information, and archive and govern messages and
critical enterprise information. More information is available at
www.proofpoint.com. 
Proofpoint, Enterprise Protection and Targeted Attack Protection are
trademarks or registered trademarks of Proofpoint, Inc. in the U.S.
and/or other countries. Sendmail and Sentrion are trademark or
registered trademarks of Sendmail, Inc. in the U.S. and/or other
countries. All other trademarks contained herein are the property of
their respective owners. 
Forward-looking Statements  
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
including, among other things, the expected financial performance of
Proofpoint (including revenue and earnings guidance) resulting from
the acquisition. Actual results could differ materially from those
projected in the forward-looking statements as a result of certain
risk factors, including but not limited to: the potential impact on
the business of Sendmail due to the acquisition; ; general economic
conditions; and the ability of Proofpoint to successfully integrate
Sendmail's market opportunities, technology, personnel and operations
and to achieve expected benefits. These forward-looking statements
are based on current expectations and are subject to uncertainties
and changes in condition, significance, value and effect as well as
other risks detailed in documents filed with the Securities and
Exchange Commission, including Proofpoint's Annual Report on Form
10-K for the fiscal year ended December 31, 2012, Proofpoint's most
current quarterly report on Form 10-Q, and current reports on Form
8-K that Proofpoint may file from time to time, which could cause
actual results to vary from expectations. Proofpoint assumes no
obligation to, and do not currently intend to, update any such
forward-looking statements after the date of this release. 
Media Contact: 
Orlando DeBruce 
Proofpoint, Inc. 
408-338-6829 
odebruce@proofpoint.com  
Sarmishta Ramesh
Ogilvy Public Relations
303-527-4615
sarmishta.ramesh@ogilvy.com