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

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags business issuesNetworkingElliott ManagementRiverbed TechnologyMergers and acquisitions

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Stephen Lawson

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?