Sunnyvale-Based Blue Coat Systems to Acquire Packeteer for $268M

Sunnyvale, Calif. -- Blue Coat Systems, a Sunnyvale-based maker of appliances and software used in content and application delivery, said on Monday that it will pay about $268 million in cash to acquire Packeteer, a Cupertino-based developer of technology that helps identify specific applications over wide area networks. To help pay for the acquisition, expected to close by mid-year, Blue Coat has agreed to issue $80 million in convertible notes to Francisco Partners II and an affiliate of Elliott Associates in a private placement. The notes are due in 2013. As part of the deal, Elliott Associates will terminate its tender offer for Packeteer and sell its 9.9% stake in the company to Blue Coat. "The acquisition of Packeteer will enable us to extend our leadership in solving branch office application performance challenges and addressing security threats," said Brian NeSmith, the president and CEO of Blue Coat Systems. "At the same time, we will begin to aggressively integrate Packeteer technologies with our own." Packeteer has more than 10,000 customers worldwide.
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