Apptix Acquires Mi8 to Assume Dominant Position in the On-Demand Messaging and Collaboration Market for Small and Medium-Sized Businesses

Merger of Two Hosted Exchange Leaders Expands Apptix’s Presence in Fast Growing Mid-Market Segment

Herndon, Va. – September 11, 2006 – Apptix, a premiere provider of on-demand messaging and collaboration solutions for small and medium-sized businesses (SMBs), today announced that it has acquired Mi8 Corporation. The acquisition of Mi8, headquartered in New York and having operations in Austin, Texas, establishes Apptix as the dominant provider of on-demand messaging and collaboration solutions to the SMB market.

Founded in 1997, Mi8 was one of the first companies to offer Microsoft Exchange in an on-demand model. Mi8 focuses on providing Hosted Exchange Services, along with complementary products including archiving, mobility and advanced email defense services (virus protection, anti-spam and content filtering). Earlier this year, the company began offering a service based on Hosted Windows SharePoint Services. Mi8 is ISO 9001:2000 certified and over the last several years has developed a reputation for operational and customer service excellence..

Mi8 was profitable in the first half of 2006, generating $4.87 million in top line revenue and $4.61 million in recurring revenue during the period. During 2005, the company generated $6.45 million in top line revenue and $5.42 million in recurring revenue. The company presently has approximately 1,750 customers and 40,000 end users of Exchange. At the end of the second quarter, approximately 67% of users were from customers with more than 50 users. Mi8′s gross margins are in line with what Apptix has experienced over the last several quarters.

“Service providers such as Apptix and Mi8 are an essential delivery channel for Microsoft offerings such as Hosted Exchange to small and medium-sized businesses seeking enterprise-class messaging and collaboration services,” said John Zanni, director of worldwide hosting at Microsoft Corp. “With more than 130,000 subscribers, Apptix has built a very successful business with Hosted Exchange as the anchor service offering. Microsoft looks forward to a continued successful relationship with the new company as they bring new offers to their customers.”

“Service providers such as Apptix and Mi8 are an essential delivery channel for Microsoft offerings such as Hosted Exchange to small and medium-sized businesses seeking enterprise-class messaging and collaboration services,” said John Zanni, director of worldwide hosting at Microsoft Corp. “With more than 130,000 subscribers, Apptix has built a very successful business with Hosted Exchange as the anchor service offering. Microsoft looks forward to a continued successful relationship with the new company as they bring new offers to their customers.”

This acquisition complements Apptix’s strong organic growth and provides significant synergies including:

The combined entity will be a dominant market leader for Hosted Exchange with over 130,000 subscribers
Increasing Apptix’s pro forma top line revenue and monthly recurring revenue for the first half of 2006 to approximately $12.68 million and $12.03 million respectively, an increase of approximately 62.4% and 62.2% respectively
Strong increase in revenue while maintaining Apptix’s current gross margins
A strong presence in the fast growing mid-market segment
A direct sales model that complements Apptix’s web-based and channel sales model
Geographic expansion into Europe through Mi8′s data center in the UK
Highly scalable and redundant data centers in the US (New York) and the UK (London)
Acceleration of the development of a single platform for Apptix’s web properties
Acceleration of Apptix’s time to profitability due to the accretive nature of this acquisition
The total consideration for the acquisition is $21 million in cash. Of this, an initial payment of $19.43 million will be paid in cash at the time of closing. An additional amount of $1.67 million will be placed into an escrow account for a period of nine months from closing subject to the satisfaction of all representations and warranties contained in the stock purchase agreement.

“This acquisition clearly establishes Apptix as the dominant leader in the delivery of on-demand messaging and collaboration solutions for the SMB market,” said Amir Hudda, CEO of Apptix. “The powerful combination of Apptix and Mi8 provides SMBs with a clear choice when seeking a vendor with a comprehensive portfolio of solution offerings and the long term viability of a public company with a strong financial position.”

As part of this transaction, all employees of Mi8, including CEO Huw Thomas, will become employees of Apptix and remain in their respective locations.

“This acquisition brings together two pioneers in the delivery of Hosted Exchange as an on-demand service,” said Huw Thomas, CEO of Mi8. “This transaction will provide our customers with the same high quality service and support they have come to expect and provide them with an expanded services and support infrastructure.”

About Apptix
Apptix (OSE:APP), founded in 1997, is a premiere provider of on-demand messaging and collaboration solutions to over 130,000 end users across more than 12,000 customers worldwide. Its offerings, including Hosted Exchange, SharePoint, Mobile Messaging, and Archiving and Compliance, provide small and medium-sized businesses with a more affordable, reliable and secure alternative to purchasing and managing software applications in-house. Leading channel partners, including IBM, Hewlett Packard, Bell Canada, and Savvis, have selected the Apptix Service Management Platform, which supports a full range of private-label solutions and is backed by multi-tiered customer service. Apptix is a Microsoft Gold Certified Partner for Hosting and Application Services, and has strong technology partnerships with leading vendors including Research in Motion and Good Technology, among others.

Apptix’s web properties include www.ASP-One.com, www.MailStreet.com, and www.Mi8.com, which provide Hosted Exchange and essential add-on services, as well as www.SharePointSite.com, which provides Hosted SharePoint and related services. The company is headquartered in Herndon, Virginia, with additional locations across the United States, Europe and Asia. For more information, visit www.apptix.com.