Riverbed finds a buyer in private equity firm Thoma Bravo
Riverbed has been pursuing some financial strategic alternatives - namely new and more stable ownership - for months, and now a concrete deal is on the table.
The IT infrastructure company announced on Monday that it has 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 will receive $21.00 per share in cash, which puts the deal's value at approximately $3.6 billion.
Riverbed CEO Jerry Kennelly will remain in his role.
Still 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.
Qatalyst Partners and Goldman, Sachs & Co. are serving as financial advisors to Riverbed with Wilson Sonsini Goodrich & Rosati tapped for legal assistance. Kirkland & Ellis is serving as legal advisor to Thoma Bravo.
"Having undertaken a thorough strategic review, during which we assessed a wide variety of options to maximize value, the Board unanimously concluded that partnering with Thoma Bravo was the best choice for Riverbed, as this transaction will provide our stockholders with significant and immediate cash value," Kennelly wrote in the announcement.
Ahead of publishing its third quarter earnings report in October, Riverbed had looked poised as a potential buy for the likes of Cisco, Citrix or privately held Blue Coat Systems.
At the time, Riverbed had cut it sales outlook, which Kennelly attributed to "current business conditions" for the sales warning as the company's revenue growth stalled in 2014.
Riverbed's sales had also 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.