By Lisa Kerner
Charlotte, N.C., April 21 - Blue Coat Systems, Inc. agreed to acquire Packeteer, Inc. for $7.10 per share in a deal valued at some $268 million, it was announced on Monday.
The merger will enable Blue Coat to incorporate Packeteer's networking technologies into its ProxySG family of appliances and expand cross-selling opportunities, Blue Coat said.
Blue Coat will acquire Packeteer through a tender offer followed by a merger of Packeteer with a Blue Coat subsidiary.
Funding for the transaction will come from available cash and an $80 million convertible notes financing, Blue Coat said.
The transaction is slated to close in the second quarter of 2008.
Elliott Associates, LP announced its affiliate, Elliott QoS LLC, terminated its $5.50-per-share offer for Packeteer.
On April 16, Elliott extended the unsolicited tender offer for Packeteer to April 23 from April 16 after a total of only 332,379 shares of Packeteer stock had been tendered.
No shares were purchased in the offer, and all shares previously tendered and not withdrawn will be returned, according to a statement released by Elliot.
Packeteer's board of directors rejected Elliott's offer, valued at $190 million, and recommended its shareholders not tender their shares, it was previously reported.
"WAN optimization is the starting point for adding the next layer of intelligence to the corporate network," Brian NeSmith, president and chief executive officer of Blue Coat, said in a news release. "The acquisition of Packeteer will enable us to extend our leadership in solving branch office application performance challenges and addressing security threats by adding an extensive, experienced sales channel, integrating our sales organizations and by reinvigorating the well-regarded PacketShaper product and adding it to our solution set," NeSmith said.
NeSmith said he expects "substantial cost reductions and significant economies of scale almost immediately."
Merrill Lynch & Co. advised Blue Coat. Packeteer was advised by UBS Securities.
Blue Coat provides hardware appliances and software for controlling and securing web-based communications in the secure internet gateway and wide area network (WAN) application delivery markets. The company is based in Sunnyvale, Calif.
Packeteer is a networking technology company located in Cupertino, Calif.
| Acquirer: | Blue Coat Systems, Inc.
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| Target: | Packeteer, Inc.
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| Announcement date: | April 21
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| Transaction total: | $268 million
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| Price per share: | $7.10
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| Expected closing: | Second quarter of 2008
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| Stock price of target: | Nasdaq: PKTR: $6.18 on April 18
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