Proofpoint To Buy Cybersecurity Startup Meta Networks For $120M

Proofpoint has agreed to pay $120 million to acquire network access vendor Meta Networks to help customers better protect people, applications and data as they move beyond the traditional perimeter.

The Sunnyvale, Calif.-based cybersecurity vendor said it plans to integrate Tel Aviv, Israel-based Meta Networks' zero trust network access technology into Proofpoint's cloud access security broker (CASB) and web isolation product lines to offer customers a more comprehensive cloud access and security platform.

As organizations continue to move their infrastructure to the cloud, the compromise of a single user all too often leads to a full enterprise breach, according to Proofpoint CEO Gary Steele. He said restricting employee and contractor access from the entire corporate network to only authorized resources is a critical control to have in place.

[Related: Proofpoint To Buy Phishing Simulation And Training Provider Wombat Security Technologies for $225M]

"By combining Meta Networks' innovative zero trust network access technology with our people-centric security capabilities, Proofpoint will make it far simpler for enterprises to precisely control employee and contractor access to on-premises, cloud, and consumer applications," Steele said in a statement.

The Meta Networks deal is expected to close by the end of June, with Proofpoint paying $111 million in cash and roughly $9 million in common stock and options. The deal isn't expected to materially impact Proofpoint's financial results in 2019, according to the company. Proofpoint's stock remained unchanged at $123.85 in after-hours trading Monday.

Meta Networks was founded in 2016, and employs approximately 20 technical contributors in Israel, according to the company. The company's Network-as-a-Service (NaaS) offers connects and secures people, applications, clouds, data centers and offices with a software-defined perimeter, Proofpoint said.

NaaS replaces site-centric network security with granular, zero trust access control, packet-level and auditable user and device identity, as well as best-of-breed internet security, according to the company. The offering was first introduced in April 2018, and is priced on a per-user, per-month basis, according to the CRN 2018 Tech Innovators Databank.

"Protecting people and resources beyond the traditional perimeter is perhaps the most critical security requirement in the cloud era," Meta Networks Founder and CEO Etay Bogner said in a statement. "Together with Proofpoint, we will continue to realize a security vision that adapts to the way both threats and infrastructure are moving: to the cloud."

Meta Networks does 80 percent of its business through the channel, and recently launched a three-tier partner program with training and certification, financial rewards, sales enablement tools, sales leads, and access to market development funds, according to the CRN 2019 Channel Chiefs profile for Director of Sales Royi Barnea. Meta Networks signed 12 new partners in the second half of 2018, he said.

"The easy to sell and deliver cloud-native solution provides attractive pricing modules, low-touch onboarding, central policy management, enterprise-wide visibility, and seamless support for a much needed and profitable complement to any service portfolio," Barnea wrote in his Channel Chiefs profile.

Proofpoint has made two acquisitions in the past 18 months, scooping up messaging security company Cloudmark for $110 million in November 2017 and security awareness and training provider Wombat Security Technologies for $225 million in February 2018. The Meta Networks deal would be Proofpoint's 16th acquisition since being founded in 2002, according to Crunchbase.