Security hardware vendor Watchguard, has accepted a bid to be bought out by private investment firm Francisco Partners.

In a deal worth a surprisingly low $4.25 a share, or $151 million in cash, the loss-making public-listed company will become a private outfit again.

It is believed that some investors have yet to agree to the deal, which puts a lower valuation on the company than that of a recent rival bid by co-shareholder Vector Capital.

"We believe that this transaction is the right decision for our shareholders, customers, partners and employees," said Ed Borey, Watchguard’s CEO, who gave no hint on whether the buy-out would result in management changes.

Vector was reported to be unhappy at developments, having tabled two higher bids earlier this year. "We are surprised and confused by the board's actions, as the rest of the shareholders are," Alex Slusky of Vector was reported to have said.

"We are trying to reach out to the company and its board and management team to see why they made the decision they made. It is difficult to understand from the outside."

Watchguard has had its troubles in the last couple of years, with resellers complaining privately of slow delivery of new product designs, and indecisive management.

It seems, however, that the biggest problem has been the in the US home market, where sales have remained flat in the growing UTM (unified threat management) space that Watchguard helped pioneer.

Ian Kilpatrick, managing director of Watchguard’s premier UK reseller Wick Hill, was upbeat about the company’s prospects.

“It’s an appropriate way for them to go. I expect them to be re-energised,” he said. “They’ve got a good product. They just haven’t been taking advantage of it.”

In March, Wick Hill had had its best ever sales volume for Watchguard products. He was baffled by the low share price of Watchguard’s shares in recent months, which at one point took them close to the total value of cash in the bank.

That hasn't stopped Wick Hill from hedging its bets by taking on new companies with products that overlap those of Watchguard, however.

Why did the company accept a lower bid from Francisco than was on the table from another party? It is possible that the management was defending its own corner, fearing perhaps that Francisco would make wholesale changes to the company’s management.

The security market has been living through boom times, and yet Watchguard has not managed to repay its investors with a pay-day, either by being bough at a premium or profitability and dividends.