WatchGuard Technologies has announced that it has entered into a definitive agreement with Vector Capital to make a large new equity investment in the business, acquire interests previously owned by Francisco Partners and other co-investors, and become the company's majority shareholder. Financial terms were not disclosed.

Founded in 1996, WatchGuard has made enterprise-grade security accessible to all types of organizations for more than 25 years. The company's unique focus on delivering best-of-breed security offerings and enabling managed service providers (MSPs) to easily deploy and administer these solutions has fueled mainstream adoption of advanced cybersecurity.

During Vector Capital's and Francisco Partners' joint ownership for more than a decade, WatchGuard transformed from a trusted network security vendor to a full-fledged cybersecurity platform provider. Today, the company's Unified Security Platform enables more than 17,000 MSPs to protect the environments, users and networks of more than 250,000 businesses worldwide.

Building on its prior ownership, Vector Capital is well-positioned to partner with WatchGuard's management team to further accelerate the company's growth. WatchGuard will continue to invest in critical areas including but not limited to cloud transformation, secure access service edge (SASE), extended detection and response (XDR), managed detection and response (MDR), and further innovation in security automation and simplification for MSPs.

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

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

"MSPs represent the future of security delivery, but to be successful, they need a bespoke platform built for their needs," said Sandy Gill, managing director, Vector Capital. "WatchGuard is uniquely positioned to lead the market in enabling those MSPs with its Unified Security Platform. We are excited to further invest both organically and via acquisitions in the company's mission to deliver security-focused MSPs one vendor, one platform and one vision to build their business on."

"WatchGuard has established itself as a leading cybersecurity company under our joint ownership, with a relevant product portfolio, strong partner ecosystem and talented team of employees," said Ben Ball, partner, Francisco Partners. "We are proud of our role in supporting WatchGuard's transformation and we look forward to following the company's ongoing success as they continue to pave the way for simplified security when the industry needs it most."

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 Technologies. Sidley Austin LLP and Richards, Layton & Finger are serving as legal counsel to WatchGuard Technologies. Kirkland & Ellis LLP is serving as legal counsel to Vector Capital.