Vector Capital has made a fresh equity investment in WatchGuard to become the company’s majority shareholder, snapping up shares previously owned by Francisco Partners and other co-investors.
The private equity firm has held joint ownership of WatchGuard for more than a decade, overseeing the business transform from a network security vendor to a fully-fledged cyber security platform provider.
The company’s Unified Security Platform is now, in fact, used by more than 17,000 managed service providers (MSPs) to protect the environments, users and networks of more than 250,000 businesses worldwide.
WatchGuard CEO Prakash Panjwani said the move was a sign of Vector’s belief in the company’s portfolio, partners, employees and vision.
“This transaction is a testament to WatchGuard’s current success and the opportunity ahead,” he said. “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.”
Looking forward, WatchGuard said it’ll continue to invest in critical areas, including cloud transformation, secure access service edge (SASE), extended detection and response (XDR), managed detection and response (MDR), as well as further innovation in security automation and simplification.
Sandy Gill, managing director of Vector Capital, highlighted the importance of a bespoke platform that’s built to suit MSP needs.
“MSPs represent the future of security delivery, but to be successful, they need a bespoke platform built for their needs,” he said. “WatchGuard is uniquely positioned to lead the market in enabling those MSPs with its Unified Security Platform.
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“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 upon.”
Alex Slusky, founder, managing director and chief investment officer of Vector Capital, added: “We are proud of the foundation of success we’ve built with WatchGuard’s management team and look forward to fuelling the next phase of growth and transformation for the company.”
The transaction is expected to close by the end of the third quarter of 2022, subject to customary closing conditions. Financial terms were not disclosed.
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