Proofpoint buys inside-threat management firm ObserveIT for $225m

Deal to close before the end of the year

Cyber security firm Proofpoint is to buy inside-threat management firm ObserveIT for $225 million in cash.

The move comes as part of Proofpoint's strategy to "extend its data loss prevention capabilities" with endpoint services.

Proofpoint claims that the new deal will enable it to protect enterprise customers from cyber attacks in a much better way. Its intelligence and threat detection capabilities, when combined with ObserveIT's endpoint agent technology, will offer customers a greater visibility into user activity, as well as potential threats to their most sensitive data.

The deal is expected to close before the end of the year, subject to regulatory approvals, which should be a formality.

Sunnyvale, California-based Proofpoint provides enterprise security services that includes data loss prevention, email and mobile protection, and other offerings. The company posted revenues of $717 million in 2018.

This is Proofpoint's third Israeli security deal in the last three years. In 2016, it acquired FireLayers, a cloud security firm. In May this year, Proofpoint announced that it had agreed to buy MetaNetworks, a compliance company specialising in access network security in a $120m deal.

Boston-based ObserveIT focuses on insider-threat detection and endpoint security. It offers real-time enterprise network management solutions to enterprise customers, and alerts them in case some suspicious activity is detected.

The company promises to prevent data loss for customers by monitoring the activities of employees, evaluating drifts in user activity and also observing the behaviour of users on client networks.

ObserveIT was founded in 2006 in Tel Aviv, Israel. It currently employs approximately 150 people, of which 70 are based in Israel.

"By joining with Proofpoint, we have the capabilities to completely disrupt the DLP [data loss prevention] space with a solution for comprehensive detection and prevention of sensitive data exfiltration," ObserveIT's CEO Mike McKee said in a blog post.

"I look forward personally to joining the Proofpoint team, and I am highly confident in our collective ability to make this a seamless transition and to very quickly deliver the benefits of this partnership to all."