Key Takeaways
- • Riverbed Technology agreed to be acquired by private equity firm Thoma Bravo and Ontario Teachers' Pension Plan for $3.6 billion, or $21 per share in cash, representing a premium over the company's prior trading price of $20 per share.
- • The transaction marks Thoma Bravo's largest acquisition to date and concludes over a year of activist pressure from Elliott Management, which had rejected a $3 billion bid from the hedge fund earlier in 2014.
- • Riverbed's board unanimously approved the deal after a complete strategic review, enabling the company to transition to private ownership and pursue growth opportunities with greater operational flexibility.
- • The acquisition follows Riverbed's divestiture of its SteelStore backup appliance line to NetApp for $80 million just over a month prior, streamlining the company's portfolio ahead of the transaction.
- • Thoma Bravo, a Chicago-based private equity investor with deep technology sector expertise, will leverage its 30-year track record and complementary portfolio companies—including competitor Blue Coat Systems—to support Riverbed's next phase of expansion.
Summary
Riverbed Technology closed out 2014 by announcing its agreement to be acquired by private equity firm Thoma Bravo and the Ontario Teachers' Pension Plan in an all-cash transaction valued at approximately $3.6 billion. Under the terms, Riverbed shareholders will receive $21 per share, representing a premium to the company's stock price of $20 per share at announcement. The transaction marks the culmination of significant corporate activity and activist pressure that dominated Riverbed's strategic agenda throughout the year.
The deal resolves a prolonged activist campaign led by Elliott Management and its portfolio manager Jesse Cohn, who had publicly pushed for a sale of the company. Elliott initially submitted a $3 billion takeover proposal at the start of 2014, which Riverbed's board rejected. However, continued pressure from the activist investor prompted the board to initiate a comprehensive strategic review of alternatives, ultimately leading to the Thoma Bravo partnership. The unanimous board approval reflects confidence in the private equity firm's ability to drive shareholder value and support the company's growth trajectory.
Riverbed's chairman and CEO Jerry Kennelly stated that Thoma Bravo represents the optimal partner given its 30-year track record in the technology sector and existing portfolio of complementary investments. The Chicago-based private equity firm brings both operational expertise and strategic flexibility that will allow Riverbed to pursue growth initiatives as a privately held company, according to the statement. The acquisition represents Thoma Bravo's largest investment to date, signaling the firm's confidence in Riverbed's market position and growth potential.
The transaction arrives shortly after Riverbed divested its SteelStore backup appliance line to NetApp for $80 million, streamlining its product portfolio and allowing management to focus on core business operations. Going private will eliminate quarterly public company reporting requirements and provide the company with greater operational and capital allocation flexibility as it advances to its next phase of development.
The deal resolves a prolonged activist campaign led by Elliott Management and its portfolio manager Jesse Cohn, who had publicly pushed for a sale of the company. Elliott initially submitted a $3 billion takeover proposal at the start of 2014, which Riverbed's board rejected. However, continued pressure from the activist investor prompted the board to initiate a comprehensive strategic review of alternatives, ultimately leading to the Thoma Bravo partnership. The unanimous board approval reflects confidence in the private equity firm's ability to drive shareholder value and support the company's growth trajectory.
Riverbed's chairman and CEO Jerry Kennelly stated that Thoma Bravo represents the optimal partner given its 30-year track record in the technology sector and existing portfolio of complementary investments. The Chicago-based private equity firm brings both operational expertise and strategic flexibility that will allow Riverbed to pursue growth initiatives as a privately held company, according to the statement. The acquisition represents Thoma Bravo's largest investment to date, signaling the firm's confidence in Riverbed's market position and growth potential.
The transaction arrives shortly after Riverbed divested its SteelStore backup appliance line to NetApp for $80 million, streamlining its product portfolio and allowing management to focus on core business operations. Going private will eliminate quarterly public company reporting requirements and provide the company with greater operational and capital allocation flexibility as it advances to its next phase of development.
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