Menu
Riverbed may go private in a $3 billion deal

Riverbed may go private in a $3 billion deal

An investment company wants to acquire the WAN optimization vendor

Investment company Elliott Management has offered to buy WAN optimization vendor Riverbed Technology for just over US$3 billion while giving Riverbed a chance to entertain higher bids.

Elliott started buying Riverbed stock last September and now owns about 10.5 percent of the company, according to an offer letter sent Wednesday that Riverbed filed with the U.S. Securities and Exchange Commission. Elliott said growth is slowing in Riverbed's core business and the company's efforts to diversify so far have hurt its value.

Riverbed's core products are appliances that help enterprises use expensive wide-area networks more efficiently. In recent years, the San Francisco company has acquired other businesses to expand its offerings, most notably buying Opnet in 2012 for about $1 billion for its tools to gauge and manage the performance of applications and networks. In addition to its Steelhead WAN optimization appliances, Riverbed now offers the Stingray line of application delivery controllers and Granite cloud computing technology.

Elliott's buyout plan includes a "go-shop" provision that would let Riverbed's board seek competing bids for a period after it reached a deal with Elliott.

"We are aware that numerous parties have expressed acquisition interest in Riverbed, and this structure guarantees that the Company will secure a healthy premium for its stockholders while holding open the opportunity to obtain an even higher premium," the letter said.

Elliott is offering to buy all of Riverbed's stock for $19 per share. Riverbed has about 162 million shares outstanding. The New York investment company said its offer represents a 29 percent premium over Riverbed's stock price before Elliott started buying large numbers of shares, a move that Elliott said has driven up Riverbed's shares.

In the quarter ended Sept. 30, Riverbed posted revenue of $262 million, up 20 percent from a year earlier, and a profit of $3.8 million, down from $24.7 million.

Elliott said it has long been involved with IT and networking companies. It was part of a consortium led by Bain Capital and Golden Capital that bought systems management vendor BMC Software last year for $6.9 billion.

In midday trading on Wednesday, Riverbed's shares were up $1.95 at $19.80.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Mergers and acquisitionsbusiness issuesNetworkingRiverbed TechnologyElliott Management

Featured

Slideshows

EDGE 2018: Kiwis kick back with Super Rugby before NZ session

EDGE 2018: Kiwis kick back with Super Rugby before NZ session

New Zealanders kick-started EDGE 2018 with a bout of Super Rugby before a dedicated New Zealand session, in front of more than 50 partners, vendors and distributors on Hamilton Island.​

EDGE 2018: Kiwis kick back with Super Rugby before NZ session
EDGE 2018: Kiwis assess key customer priorities through NZ research

EDGE 2018: Kiwis assess key customer priorities through NZ research

EDGE 2018 kicked off with a dedicated New Zealand track, highlighting the key customer priorities across the local market, in association with Dell EMC. Delivered through EDGE Research - leveraging Kiwi data through Tech Research Asia - more than 50 partners, vendors and distributors combined during an interactive session to assess the changing spending patterns of the end-user and the subsequent impact to the channel.

EDGE 2018: Kiwis assess key customer priorities through NZ research
Show Comments