WatchGuard Technologies to be Acquired by Francisco Partners; Agreement Positions WatchGuard for Continued Growth
25 July 2006 - 9:00PM
Business Wire
WatchGuard Technologies, Inc. (Nasdaq:WGRD), a leading provider of
Unified Threat Management (UTM) solutions, and Francisco Partners,
one of the world's largest technology-focused private equity funds,
announced jointly today that WatchGuard's board has approved a
definitive agreement whereby funds managed by Francisco Partners
will, subject to customary closing conditions, acquire all of the
outstanding shares of WatchGuard. Under the terms of the agreement,
WatchGuard shareholders will receive $4.25 in cash for each share
of WatchGuard common stock. The all-cash transaction is valued at
approximately $151 million. "We believe that this transaction is
the right decision for our shareholders, customers, partners and
employees," said Ed Borey, chairman and chief executive officer of
WatchGuard. "Since I joined the Company two years ago, we have
worked to execute a strategy focused on building a stronger, more
nimble provider of network security solutions to the small- to
medium-sized market. We believe that the transaction we are
announcing today represents the successful culmination of that
effort." "We are very excited about the opportunity to partner with
WatchGuard," commented Ben Ball, managing director of Francisco
Partners. "WatchGuard is a leader in the unified threat management
appliance industry with a strong reseller and customer base. The
Company has made significant investments in new product development
efforts that we believe will fuel future growth. We are committed
to the Company's resellers and customers and look forward to
further strengthening those relationships." The parties anticipate
closing the transaction in the fourth calendar quarter of 2006. The
closing is subject to approval by holders of a majority of
WatchGuard's outstanding common stock and regulatory and other
closing conditions. Certain WatchGuard directors and officers,
representing approximately 5.8% of WatchGuard's outstanding shares,
have entered into voting agreements in support of the acquisition.
As previously announced, Wachovia Securities acted as financial
advisor to WatchGuard in connection with the transaction. About the
Transaction WatchGuard will file a proxy statement and other
documents regarding the proposed transaction described in this
press release with the Securities and Exchange Commission (SEC).
Investors and security holders are advised to read the proxy
statement and such other materials when they become available
because they will contain important information about the
acquisition and WatchGuard. Investors and security holders will be
able to obtain a free copy of the proxy statement and any other
documents filed by the company from the SEC Web site at
www.sec.gov. WatchGuard's directors and executive officers may be
deemed to be participants in the solicitation of proxies from the
stockholders of WatchGuard in connection with the proposed
transaction. Information about the directors and executive officers
of WatchGuard is set forth in the proxy statement for WatchGuard's
2006 annual meeting of shareholders, which was filed with the SEC
on March 17, 2006. Investors and security holders may obtain
additional information regarding the interest of such participants
by reading the proxy statement regarding the proposed transaction
when it becomes available. Webcast Information A conference call
discussing the transaction will be webcast live today, Tuesday July
25, at 5:30 AM Pacific Time/8:30 AM Eastern Time. It may be
accessed at WatchGuard's website at www.watchguard.com under
"Investor Relations." Replays of the webcast can also be accessed
at WatchGuard's website. The live conference call can be accessed
by calling 800-561-2731 (U.S. and Canada) and 617-614-3528
(International). The conference call passcode is 73050863. Replay
of the call may be heard from 7:00 PM Eastern Time July 25 through
August 1, 2006. The replay call-in number is 888-286-8010 (U.S. and
Canada) and 617-801-6888 (International). The conference call
replay passcode is 23885705. About WatchGuard Technologies, Inc.
WatchGuard provides network security. The company's Firebox X
family of upgradeable appliances delivers the performance,
functionality and security strength to meet the needs of
organizations of any size. WatchGuard's Intelligent Layered
Security protects against emerging threats and provides the
platform to integrate additional services offered by the Company.
All WatchGuard products include a LiveSecurity Service subscription
for vulnerability alerts, software updates, expert security
instruction, as well as individualized and self-help customer care.
WatchGuard is headquartered in Seattle, Washington, with offices
throughout Europe and Asia. About Francisco Partners Francisco
Partners is one of the world's largest technology-focused private
equity funds. The firm was founded to pursue structured investments
in technology companies undergoing strategic, technological, and
operational inflection points. Francisco Partners targets majority
and minority investments in private companies, public companies,
and divisions of public companies. Certain statements in this press
release, including statements about the potential benefits of the
proposed acquisition to WatchGuard shareholders, customers,
partners and employees and about the expected closing of the
proposed acquisition and other statements about our plans,
objectives, intentions, and expectations are "forward-looking
statements" within the meaning of the Securities Exchange Act of
1934, as amended. Forward-looking statements are based on the
opinions and estimates of management at the time the statements are
made and are subject to known and unknown risks and uncertainties
and inaccurate assumptions that could cause actual results to
differ materially from those expected or implied by the
forward-looking statements. Our actual results could differ
materially from those anticipated in the forward-looking statements
for many reasons, including the risk that the transaction is not
consummated or is not consummated within the expected timeframe,
the risk that the expected benefits of the proposed transaction are
not realized and the other risks described under "Risk Factors" in
our quarterly report on Form 10-Q for the quarter ended March 31,
2006, and in our Securities and Exchange Commission filings from
time to time. Readers are cautioned not to place undue reliance
upon these forward-looking statements, which speak only as of the
date of this release. WatchGuard, LiveSecurity and Firebox are
either registered trademarks or trademarks of WatchGuard
Technologies, Inc. in the United States and/or other countries. All
other trademarks are the property of their respective owners.
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