WatchGuard changes PE hands with new majority investment

Vector Capital has bought Francisco Partners out of their 16-year long joint ownership of the vendor

US network security vendor WatchGuard Technologies has entered into a definitive agreement with Vector Capital for the private equity firm to take a majority stake in the business.

In 2006, Vector Capital alongside Francisco Partners, bought WatchGuard for $151m when it was publicly listed on NASDAQ.

Now, the vendor has announced Vector's intent to make a "large new equity investment" in the business, acquiring interests previously owned by Francisco Partners and other co-investors, and becominf the company's majority shareholder.

Financial terms were not disclosed.

"Vector firmly believes in WatchGuard's portfolio, partners, employees, and vision. This transaction is a testament to WatchGuard's current success and the opportunity ahead," said WatchGuard CEO, Prakash Panjwani.

"We believe Vector is well positioned to further accelerate WatchGuard's growth strategy while preserving our company culture and commitment to security delivery through the MSP community."

The Seattle-based vendor said it will continue to invest in critical areas following the buyout, including cloud transformation, SASE, XDR, MDR, and further innovation in security automation and simplification for MSPs.

Alex Slusky, founder, managing director and CIO of Vector Capital, added: "We are thrilled to continue the journey we started with WatchGuard's employees, partners, and customers over a decade ago.

"We are proud of the foundation of success we've built with WatchGuard's management team and look forward to fueling the next phase of growth and transformation for the company."

The transaction is expected to close by the end of Q3 2022, subject to customary conditions.

Barclays is serving as the financial advisor to WatchGuard while Sidley Austin and Richards, Layton & Finger are serving as legal counsel.

Kirkland & Ellis is serving as legal counsel to Vector Capital.