Riverbed Technology Agrees to Be Acquired for $3.6 Billion
By Beth Jinks
Dec 15, 2014 4:43 PM ET
Technology Inc. (RVBD), under pressure all year from
activist investor Elliott Management Corp., agreed to be acquired for
about $3.6 billion by private-equity firm Thoma Bravo and Canadian
pension group Teachers’ Private Capital.
Riverbed stockholders will receive $21 a share in cash, the
computer-networking company said in a statement today. That’s 12
percent higher than Riverbed’s Dec. 12 closing price. The company in
October said it hired advisers to review strategic alternatives as it
The accepted offer matched Elliott’s own $21 bid which the hedge fund
made in February, in an effort to force an auction process. Elliott,
which acquired about 10 percent of Riverbed shares last year, has been
in a tug of war with Chief Executive Officer Jerry Kennelly about
selling his company. As part of today’s deal, Kennelly will remain at
Riverbed in the same role.
“It has been a tough few years for Riverbed,”
an analyst at FBR Capital Markets, wrote in a report. “It is nice to
see the final chapter in the Elliott activism story closed, although
we believe Riverbed could have ultimately seen a higher price in this
bidding process if the company had sought out strategic alternatives
before execution issues surfaced.”
Ives rates the stock the equivalent of a hold.
Riverbed jumped 8.4 percent to $20.31 today in
New York. Through
Dec. 12, the shares had gained 5 percent since Jan. 7, before Elliott
made its first bid.
York-based Elliott put Riverbed in play when it made an
unsolicited $19 bid in January and raised the offer to $21 a share the
following month. The activist ratcheted up the pressure Oct. 6 by
RepairRiverbed.com, which details its research and campaign. Riverbed
announced its strategic review three days later.
“We’re delighted with this outcome that gives shareholders immediate,
premium value,” Jesse Cohn, Elliott’s activist portfolio manager, said
in a statement today.
Earlier this year, Thoma Bravo was one of several buyout firms
including Silver Lake Management LLC and KKR & Co. that informally
expressed interest in San Francisco-based Riverbed with offers
approaching $25 a share, people with knowledge of the process said at
Elliott, founded by
in 1977, has pressured technology providers including NetApp Inc., BMC
Software Inc., Compuware Corp. and Juniper Networks Inc. to boost
value after taking stakes in the companies.
Teachers’ Private Capital is part of the
Teachers’ Pension Plan.
Qatalyst Partners, Goldman, Sachs Group Inc., and Wilson Sonsini
Goodrich & Rosati Professional Corp. advised Riverbed and Kirkland &
Ellis advised Thoma Bravo.
To contact the reporter on this story: Beth Jinks in New York at
To contact the editors responsible for this story: Pui-Wing Tam at
firstname.lastname@example.org Jillian Ward, Niamh Ring
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