Francisco Partners’ investment in cybersecurity company Drawbridge will be used to drive expansion and product development. Founded in 2018, Drawbridge provides a cybersecurity platform designed for the alternative investment industry. Private equity firm Long Ridge Equity Partners, which invested in the company in 2021, remains a significant equity holder in Drawbridge.
Negotiations took place during the summer of 2022 amidst weak and deteriorating market conditions and rising conservatism among private equity firms. Having invested only 15 months earlier, Long Ridge was not contemplating a move for Drawbridge so soon. But the company’s strong performance, robust growth and persistent interest from potential buyers prompted an early exploration, according to Raymond James, which served as the financial advisor to Drawbridge.
With more than 900 private equity firms and hedge funds as clients, the need for additional information systems and corporate infrastructure was known and factored into the decision to explore a transaction so soon after the company’s first investment.
Drawbridge developed a cybersecurity platform with the depth and integrity needed for the highly regulated and high cyber threat risk alternative investment industry. The platform is attractive to smaller enterprises looking to get a cybersecurity system running without the need for a sophisticated in-house team. It also has the scalability to address the demands of investment firms as their cybersecurity systems mature.
Raymond James determined that certain buyers would look at Drawbridge as a cybersecurity business, while others would approach it from a fintech standpoint and consider the company a vendor of alternatives technology. The hypothesis was that the best buyer would consider both, which proved to be true. Francisco Partners had cyber-focused and financial technology investment professionals jointly consider the opportunity. The ability to leverage both cybersecurity and fintech interest unlocked substantial value for Drawbridge and Long Ridge as early journey sellers.
For more Deals of the Year coverage, see Mergers and Acquisitions Names the 2023 Middle-Market Deals of the Year.