Exclusive: Email security software vendor Zix explores sale - sources

By Krystal Hu

(Reuters) - Zix Corp, a U.S. provider of email security solutions, is exploring strategic alternatives that include a sale of the company, according to people familiar with the matter.

Zix has hired Citigroup Inc to negotiate with interested parties that include other companies and private equity firms, the sources said.

There is no certainty any deal will be reached, added the sources, who requested anonymity because the matter is confidential.

Zix and Citigroup declined to comment.

Dealmaking is heating up in the cyber security sector as more companies rely on remote working during the COVID-19 pandemic. Private equity firm Thoma Bravo took enterprise security platform Proofpoint Inc private for $12.3 billion in August.

Zix's offerings have expanded from compliance to security solutions, and are used by 21,000 corporate and institutional customers, including 1,200 U.S. hospitals and 30% of U.S. banks, according to its website. The Dallas-based company has a market value of $436 million and had debt of $209 million as of the end of June.

Zix reported $62.83 million in revenue in its most recent quarter ending June 30, a 17.8% year-over-year increase. But its shares are down 11.2% year-to-date, amid investor concerns that it will be overtaken down the line by bigger rivals.

(Reporting by Krystal Hu in New York; Editing by Matthew Lewis)