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Riverbed Technology, Inc.



AVR Status

Riverbed reported voting approval on March 5, 2015 by 77.57% of outstanding shares for the company's agreement to be acquired by Thoma Bravo, with participation of the Ontario Teachers’ Pension Plan, at a price of $21.00 per share in cash, as presented in a January 20, 2014 Definitive Proxy Statement. Based on its review of suitability, the Forum will offer support of shareholders wishing to consider appraisal rights for realization of the company's intrinsic value.





For a company report relating to the rating report below, see


Source: Standard & Poor's Ratings Services, February 12, 2015 report

Riverbed Technology Inc. Assigned Preliminary 'B' Corporate Credit Rating; Outlook Stable; Debt Ratings Assigned

Publication date: 12-Feb-2015 12:39:42 EST

  • Riverbed Technology Inc., a U.S. provider of application performance
    infrastructure and network management products, will be acquired by Thoma
    Bravo LLC and Teachers' Private Capital.

  • Riverbed plans to issue $2.150 billion of debt to finance the
    transaction, consisting of a $100 million first-lien revolving credit
    facility (undrawn at close), a $1.525 billion first-lien term loan, and
    $625 million senior unsecured notes.

  • We are assigning our preliminary 'B' corporate credit rating to Riverbed.

  • We are also assigning our preliminary 'B' issue-level rating and '3'
    recovery rating to Riverbed's first-lien term loan and revolving credit
    facility, and a preliminary 'CCC+' issue-level rating and '6' recovery
    rating to the company's senior unsecured notes.

  • The stable outlook reflects our expectation that the company will
    maintain its leadership position in the wide area network (WAN)
    optimization market and continue to generate positive free operating cash
    flow (FOCF) post-acquisition.

NEW YORK (Standard & Poor's) Feb. 12, 2015--Standard & Poor's Ratings Services today assigned its preliminary 'B' corporate credit rating to San Francisco-based Riverbed Technology Inc. The outlook is stable.

At the same time, we assigned our preliminary 'B' issue-level rating and '3' recovery rating to the company's $1.525 billion first-lien term loan due 2022 and $100 million revolver due 2020. The '3' recovery rating indicates our expectation for substantial (50%-70%) recovery in the event of payment default. We also assigned our preliminary 'CCC+' issue-level rating and '6' recovery rating to the company's $625 million senior unsecured notes due 2023. The '6' recovery rating indicates our expectation for negligible (0%-10%) recovery in the event of payment default.

"Our rating on Riverbed reflects our view of the company's business risk profile as 'fair' and financial risk profile as 'highly leveraged,'" said Standard & Poor's credit analyst Kenneth Fleming.

We base our business risk assessment on Riverbed's continued reliance on its flagship SteelHead product, which faces limited growth prospects in a maturing end market, for most of its EBITDA. The company's strong position in the WAN optimization market, high contract renewal rates, diverse blue chip customer base, and solid cash flow generation somewhat offset these risk factors. The financial risk assessment incorporates adjusted pro forma leverage of about 7x 2015 EBITDA.

In our view, Riverbed has "adequate" liquidity. We anticipate coverage of uses in excess of 1.2x for the next 12 months and positive net sources over the next 12-24 months, even if the company's EBITDA declines by 15%.

We based the stable outlook on our expectation that the company will maintain its leadership position in the WAN optimization market and continue to generate positive FOCF post-acquisition.

We could lower the rating if Riverbed fails to maintain its technology leadership and market share in WAN optimization or if an inability to execute planned post-leveraged-buyout cost-cuts precludes the company from reducing leverage to a level approaching 7x over the next 12 months.


Related Criteria

Complete ratings information is available to subscribers of RatingsDirect at and at All ratings referenced herein can be found on Standard & Poor's public Web site at Use the Ratings search box located in the left column.

Primary Credit Analyst:

Kenneth J Fleming, New York (1) 212-438-1490;

Secondary Contact: James W Thomas, New York 212-438-0181;


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