Israeli start-up Sanctum, a developer of defensive and offensive applications for securing enterprise communications systems and websites, today confirmed a "Globes" report that Watchfire of Canada has acquired the company.
Watchfire, which provides the WebXM platform for managing online businesses, did not disclose the amount of the deal, but it was reportedly $40-50 million, less than the $54 million Sanctum raised in its three financing rounds to date.
Sanctum VP R&D and Sanctum Israel general manager Amit Barkan today hinted that the company would probably hold an IPO in a year. "Both companies are privately-owned, at least for another year. The merger wasn’t carried out for no reason, and I'm sure that within six months, we'll know more about where the company is heading."
So far as is known, Sanctum is not yet profitable, and its sales are estimated at $10 million or more. Watchfire has $20 million in revenue, which means that the merged company can expect $30 million in sales a year.
Under the merger, ten of Sanctum's 85 employees will be fired. The merged company will absorb Sanctum's development, sales and support staff. Watchfire announced that Sanctum Israel, based in Herzliya, would continue to serve as the company's development center. Barkan would stay on as general manager in Israel, and Sanctum CTO Steve Orrin would continue in his post, but Sanctum CEO Peggy Weigle would not have a position in the merged company.
Sanctum and Watchfire negotiated for six months, following Sanctum's long search for an external investor. The companies met by chance at an exhibition attended by their executives. Barkan said, "Watchfire brings its enterprise server, which we lack, while we provide the security. The companies complement each other."
Published by Globes [online] - www.globes.co.il - on July 28, 2004