Riverbed selling off SteelApp unit to Brocade
Despite finding a buyer for the entire company at the end of last year, Riverbed continues to pawn off its goods like piecemeal.
The latest deal involves its SteelApp business for application delivery control. An announcement arrived on Thursday that Riverbed is selling the unit to Brocade in an all-cash asset transaction.
Financial terms of the deal have not been disclosed, and the acquisition is expected to be completed by the end of the first calendar quarter of 2015.
The entire SteelApp development and field personnel is expected to join Brocade once the deal closes.
Customers can expect a three to six month transition period during which customer support responsibilities and purchase order processing and invoicing will be handled jointly by Brocade and Riverbed.
Dave Peranich, president of worldwide field operations at Riverbed, promised in a memo that additional details will be made public after the acquisition goes through.
For Brocade, SteelApp fits in with an ongoing acquisition strategy to better serve enterprise and telco customers, following up similar purchases that include virtual routing and firewall Vyatta and Vistapointe, a service for virtual network visibility and analytics.
For Riverbed, it represents another cost-cutting measure for a seemingly beleaguered networking tech company.
Last October, Riverbed sold off its data backup and protection services product line SteelStore to NetApp for $80 million.
Ahead of publishing its third quarter earnings report in October, Riverbed looked poised as a potential buy for the likes of Cisco, Citrix or privately held Blue Coat Systems.
At the time, Riverbed cut it sales outlook, which CEO Jerry Kennelly attributed to "current business conditions" for the sales warning as the company's revenue growth stalled in 2014. Riverbed's sales had already disappointed Wall Street four out of the last six quarters topped by mixed earnings results on average.
Riverbed also had restructuring plans on the agenda in the hopes of slashing annual costs by $20 million to $25 million. The undisclosed number of layoffs were scheduled to be complete by the end of 2014.
The IT infrastructure company then announced in December it had been acquired by private equity investment firm Thoma Bravo along with Teachers' Private Capital, the private investor department of Ontario Teachers' Pension Plan in Canada.
Under the agreement, Riverbed stockholders would receive $21.00 per share in cash, which puts the deal's value at approximately $3.6 billion.
Subject to approval by Riverbed stockholders as well as government review in the United States, Taiwan and Germany, the transaction is projected to close during the first half of 2015.