Business
The investment firm Bain Capital LLC will buy the cybersecurity firm Blue Coat Systems Inc. for $2.4 billion. Thoma Bravo, the buyout firm, agreed to sell Blue Coat in an all-cash deal after taking it private in 2012 for $1.3 billion, reports the New York Times. Based in California, Blue Coat provides security solutions for more than three quarters of the Fortune 500 companies. In the three years since Thoma Bravo took the company private, it has acquired a series of companies to help it beef up its security offerings in areas like security analytics.
“We are very impressed with the profitable growth the company has demonstrated and believe strongly in the future growth of the cyber security market and Blue Coat’s position in this important sector,” David Humphrey, a managing director at Bain Capital, said in a statement. Bain Capital could look to take the company back to the public markets, according to someone familiar with the company’s thinking but not authorized to speak publicly.
The deal comes amid strong demand for cybersecurity technology following a spate of high-profile breaches that have crippled businesses and rattled conglomerates such as Sony Corp and Target Corp, notes Reuters. "This is a land-grab market opportunity, and private equity as well as larger tech players, have a strong appetite for vendors that play in this $15 to $20 billion market opportunity," said FBR Capital Markets analyst Daniel Ives. Since going private, Blue Coat has increased its scale through a number of acquisitions. These have included anti-malware company Norman Shark; Solera Networks, which uses data mining to detect potential security threats; and Netronome's SSL technology, which helps inspect Internet traffic.
The company now counts 80% of the Fortune 500 as customers and blocks over three million threats a day, according to the Wall Street Journal. “We are excited by the opportunity to work with Blue Coat’s world-class management team to grow the business organically and through acquisitions, and to ultimately return the company to the public markets,” said Bain Managing Director David Humphrey. The Wall Street Journal reported last month that Thoma Bravo was renewing its efforts to sell Blue Coat. Thoma Bravo, which specializes in technology investments, last year held talks with so-called strategic buyers including defense contractor Raytheon Company but those talks didn't result in a deal, people familiar with the matter said.
