Riverbed Technology which is a networking equipment maker said that it would sell itself to Ontario Teachers’ Pension Plan’s private equity arm and Thoma Bravo for approximately $3.6 billion in cash.
As per the deal, the Canadian pension plan and Thoma Bravo will pay $21 per share which represents an 11 percent premium above the closing price on Friday.
The transaction came after months of pressure on the company from activist investment firm, Elliott Management. In January, Elliott itself bid $19 per share to try to jump-start an auction process, a tactic which the investment firm had earlier used to successfully spark the sales of BMC Software and Novell.
In February, Elliott Management raised its bid to $21 per share. Riverbed Technology had seemed by and large unwilling to bow to the demands of Elliott Management.
The chief executive and chairman of Riverbed, Jerry M. Kennelly said that they are extremely pleased with this transaction, which they believe will be a winning proposition for all of their stakeholders. Mr. Kennelly added that he is expected to stay on as chief executive of Riverbed when the deal is completed. The transaction is expected to close in the first half of next year, pending approval by regulators and shareholders. Elliott said that it has supported the deal.
In the United States, the firm’s head of equity activism, Jesse Cohn said that as Riverbed’s largest shareholder, they are delighted with this outcome that gives shareholders immediate, premium value. He further stated that Elliott had made a bid to buy Riverbed Technologies nearly a year ago and they commend Jerry and the rest of Riverbed’s board for taking this bold step.
Goldman Sachs and Qatalyst Partners advised Riverbed and legal advice was provided by Wilson Sonsini Goodrich & Rosati. The law firm Kirkland & Ellis has counseled Thoma Bravo.