We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message
80,258 News Articles

Private investment firm buys Blue Coat for $1.3B

Blue Coat Systems has agreed to be bought by a private equity firm for about $1.3 billion, which will buy out shareholders for a 48% premium over what the company's stock sold for yesterday.

Private equity and investment firm Thomas Bravo leads an investment group that made the offer.

SLIDESHOW: 25 top network and IT industry news stories of 2011

A spokesman for the company says the change in ownership should have no effect on the company's security and WAN optimization products.

The upside is that the company won't have to respond to quarterly pressures from Wall Street and will spend less on financial reporting required of public companies, the spokesman says.

Blue Coat is operating under its third CEO since September when Michael Borman took over for Brian Nesmith. Borman left and was replaced by Gregory Clark in August of this year.

The company's numbers declined steadily under Borman, and its board started re-evaluating what to do with it about six months ago, Blue Coat Chairman David Hanna says in a press release.

Selling the company was not the plan when Borman was hired, the company said at the time. At his previous CEO job at Avocent, that company was sold. When Blue Coat hired him, he said he would not change the strategic direction of the company.

Blue Coat's stock price declined steadily from January when it peaked about $32 through most of August when it bottomed out at just over $12. Since then it has climbed gradually to about $18, taking a sharp spike today on news of the buyout to more than $25 at 11 a.m. Eastern Standard Time.

Similarly, its profits took a tumble from $18.1 million in the quarter ending in October 2010 to $8.4 million in the quarter ending in August of this year. For the latest reported quarter ending October of this year, profits were up to $9.3 million.

Read more about data center in Network World's Data Center section.

IDG UK Sites

LG G4 Note UK release date and specification rumours: Samsung Galaxy Note 5 killer could be the LG 3......

IDG UK Sites

In defence of BlackBerrys

IDG UK Sites

Why we should reserve judgement on Apple ditching Helvetica in OS X/iOS for the Apple Watch's San...

IDG UK Sites

Retina 3.3GHz iMac 27in preview: Apple cuts £400 off Retina iMac with new model