BROOMFIELD — New York-based data-solutions provider Return Path has sold its Broomfield-based email fraud protection business unit to Proofpoint Inc. for $18 million.
Proofpoint (Nasdaq: PFPT), headquartered in the Denver Tech Center, will take over Return Path’s EFP division offices at 8001 Arista Place, Suite 300, in Broomfield and hire all existing employees of the division, according to a Proofpoint media release.
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Piper Jaffray analyst Andrew Nowinski said Proofpoint paid $3.8 million at the close of the transaction and will spend the remaining $14.2 million over two years to complete the deal.
“Proofpoint is the first company to deliver comprehensive BEC (business email compromise) prevention, detection and response capabilities that go beyond malware-only protection,” said Gary Steele, Proofpoint chief executive, in a prepared statement. “Organizations are plagued by financial and data loss as security teams struggle with BEC emails delivered to vulnerable users. Existing solutions available on the market today lack the advanced functionality required to stop these campaigns. Proofpoint is the recognized leader in protecting enterprises and their users from email-borne advanced threats, and this acquisition enables us to extend that protection to customers and brands.”
“BEC is one of the greatest cyber threats facing enterprises today,” added Matt Blumberg, Return Path’s founder and CEO. “Fighting it requires an entirely new approach. Return Path’s Email Fraud Protection solution has paved the way by offering unparalleled insight into phishing attacks targeting the enterprise and their customers.
“With our proprietary email threat data and technical expertise at its disposal, Proofpoint will now be fully equipped to offer the best end-to-end spear phishing solution on the market today. We are thrilled to partner with Proofpoint going forward and believe that the combined solution will be stronger for our Email Fraud Protection customers as well as a great home for the employees in our EFP division.”
According to the FBI, BEC messages have cost organizations an estimated $3.1 billion worldwide by tricking people into sending money or sensitive corporate data to cybercriminals.
“BEC threats and impostor emails may or may not contain malicious attachments or URLs, so they can evade security solutions that only identify malware,” the Proofpoint release said. “In the past month, 80 percent of a representative sample of Proofpoint customers experienced at least one BEC phishing attack attempt.”