Riverbed Sold to Equity Firms for $3.6 Billion
The company, under pressure from activist investor Elliott for a year, will be taken private by the new owners after the deal closes in 2015.Riverbed Technology, which has been under pressure for more than a year from investor Elliott Management to reduce its costs and return more money to shareholders, is being bought by private equity firms and will be taken private. Riverbed officials announced Dec. 15 that the company will be sold to Thoma Bravo and the investment arm of Ontario Teachers' Pension Plan for $3.6 billion in a deal that they said will close in the first half of 2015. The announcement comes almost a year after Elliott, the largest Riverbed shareholder, announced a $3 billion bid for the application performance infrastructure vendor. Elliott's proposal in January came after several months of speculation in 2013 about the company's future, including rumors of possible sales. In making its bid, Elliott officials lauded Riverbed's technology but said the company was underperforming and needed to increase its value to shareholders. Riverbed didn't sell to Elliott, but it has struggled through a couple of disappointing quarters, and in October, Chairman and CEO Thomas Kennelly announced it was restructuring in hopes of cutting as much as $25 million from expenses. In addition, Riverbed's board of directors undertook a comprehensive review of the company, with the sale being the result.
"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 said in a statement. "Further, Thoma Bravo is a highly regarded private equity firm with deep experience in the technology industry and a 30-year track record of helping companies like ours flourish."