Blue Coat Systems bought for $1.3B in cash

Thoma Bravo pays 50% premium, or $25.81 per share, for Web security software acquisition

A group of investors led by private equity firm Thoma Bravo confirmed Friday that it is acquiring the Web security and WAN optimization solutions company Blue Coat, valued at $1.3 billion.

The acquisition is set to give Blue Coat shareholders $25.81 per share in common stock and the board of directors at Blue Coat have already passed the agreement -- this price equates to almost 50%  more than the company's closing price in early December.

The pre-trading market has spiked in response to the news since the company stock (NASDAQ: BCSI) closed Thursday at 17.48 and is expected to open the market Friday near 25.30 (up nearly 45%.)

Blue Coat services are focused on protecting enterprises from Web-based security threats and optimizing applications for video and other media-rich content.

The Sunnyvale company released a rough fiscal second-quarter earnings report in November that showed the company revenue was slashed by 62% as the technology company continued to struggle with sales declines. For the quarter that ended Oct. 31, the company posted a profit of $4.6 million (10 cents a share) from $12 million (25 cents a share) a year earlier. Excluding stock-based compensation and other items, earnings fell to 20 cents a share from 38 cents.

In the fiscal first quarter, profits took a nose-dive 81% as sales were clipped from weak US government participation in sales.

The investor group acquiring the company includes Thoma Bravo, Ontario Teachers’ Pension Plan through its private investor department and Teachers’ Private Capital.

The transaction is subject to customary closing conditions, and Blue Coat expects the transaction to close in the first calendar quarter of 2012.

This process of considering acquisition has been a serious ongoing matter the last six months for Blue Coat's board.

"After an extensive evaluation of strategic alternatives with our independent advisors, the Board has determined that the definitive agreement with Thoma Bravo provides an attractive all-cash valuation to our shareholders. We look forward to completing the transaction under the terms of the agreement as expeditiously as possible, " David W. Hanna, chairman of the board, Blue Coat Systems, Inc., said in a statement.

Thoma Bravo has maintained a strong focus on investments in the software and service sectors. In the software sector, Thoma Bravo has completed more than 46 add-on acquisitions across 18 platform companies with total annual earnings of approximately $1 billion.