Vector Capital Buys WinZip; Private Equity Firm Focused on IT and Software Markets Identifies New Opportunities for Ubiquitous Software Product

Business Wire, July 18, 2005

SAN FRANCISCO -- Vector Capital, a private equity boutique specializing in buyouts, spinouts and recapitalizations of established technology companies, today announced it has acquired WinZip Computing, Inc., the privately-held maker of the highly popular WinZip(R) compression utility that ranks among the most widely downloaded software products in history. Terms of the acquisition, which closed earlier this year, were not disclosed.

WinZip Computing, based in Mansfield, Conn., was founded in 1991 and is best known for its ubiquitous WinZip compression software, the industry's de facto standard for compressing PC files distributed over the Internet. To date, more than 140 million personal computer users have downloaded the utility. Nearly a half-million copies continue to be downloaded each week, according to CNET Download.com, which tracks the most popular software titles downloaded for use on Microsoft Windows. This means WinZip still ranks among the top five most popular downloaded PC programs after more than a decade on the market.

"WinZip is a unique investment opportunity," said Chris Nicholson, a partner at Vector Capital and the newly-appointed chairman of WinZip Computing, Inc. "It's not every day you have the chance to acquire one of the most widely downloaded software products in history. In addition to its prior successes, we've identified significant opportunities for additional growth and value."

As part of its new growth strategy, Vector has already helped WinZip secure a co-marketing and distribution agreement with Google designed to increase both companies' distribution and to further enhance WinZip's market profile. In addition, WinZip recently released the WinZip Companion for Outlook, which automatically compresses and encrypts email attachments.

WinZip is an ideal fit with Vector Capital's strategy of investing in public and private companies with a strong customer base, proven technology and differentiated product offerings. Along with WinZip, Vector Capital II has invested in nine companies to date, including the spinouts of LANDesk(R) Software from Intel(R) Corporation and Savi(R) Technology from Raytheon(R) Corporation. Additionally, Vector Capital II includes the successful turnaround of Corel(R) Corporation, maker of the popular WordPerfect(R), CorelDRAW(R) and Paint Shop(R) families of productivity and creativity software, which Vector took private in 2003.

As with all of its investments, Nicholson said Vector worked closely with the WinZip management team to devise a new financial and business strategy. "We're excited to be part of the reinvigoration of WinZip and are confident that the company's new strategy will enhance value for employees, customers and shareholders," Nicholson commented. WinZip's current president, Edwin Siebesma, continues to lead the company's day-to-day operations.

Vector acquired WinZip via Vector Capital II, a fund that is nearly fully invested. Vector recently closed Vector Capital III, a new $350 million private equity fund. Limited partners in the new fund include university endowments, foundations, family offices, funds of funds, and pension funds. Two thirds of these investors were investors in Vector Capital II, Vector's previous fund.

About Vector Capital

Vector Capital is a private equity boutique specializing in spinouts, buyouts and recapitalizations of established technology businesses. Vector identifies and pursues these complex investments in both the public and private markets. Such opportunities are typically underserved by traditional buyout and venture capital firms. Vector actively partners with management teams to devise and execute new financial and business strategies that materially improve the competitive standing of these businesses and enhance their value for employees, customers and shareholders. Among Vector's portfolio companies are Savi Technology, LANDesk Software, Corel Corporation, and Niku.