Friday, February 17, 2012

Blue Coat Systems to Operate as a Privately Held Company under Thoma Bravo

Blue Coat Systems, founded as Cacheflow, is no more on the NASDAQ. The private equity firm, Thoma Bravo completed its $1.3 billion acquisition of Blue Coat Systems on February 15.

“This marks our fifth platform investment in the security technology sector and our fourth in networking,” said Seth Boro, partner at Thoma Bravo. “We’re confident our approach and experience in identifying strategic opportunities, coupled with Blue Coat’s innovative solutions and proven leadership in Web security and WAN optimization, establishes a platform for the company’s continued success.”

Thoma Bravo ( has a nice stable of technology companies. These include Blue Coat Systems, SonicWall, Attachmate Corporation Embarcadero Technologies, Inc., Entrust, Inc., Hyland Software, Inc., LANDesk Software, Inc., Roadnet Technologies, Inc., Sirius Computer Solutions, Inc., SonicWALL, Inc., Tripwire Inc., Vision Solutions, Inc.

The nice thing about being private is you can literally say as much or as little as you want to the public (incidents such as equipment ending up in Syria notwithstanding (a rogue reseller)) Missing earnings targets may involve the management team being given a talking to, but it won’t result in dramatic swings in stock price/market capitalization, because there is no stock. No Henry Vanderbilt like quotes, "The public be damned! I am working for my stockholders." will be issued.

Blue Coat has remained in the Leaders portion of the Gartner Secure Web and WAN Optimization Magic Quadrants over the last several years. However, companies like Zscaler, a cloud based web security solution ( “providing a high performance solution at low TCO” and Riverbed Technology ( have gotten a good share of buzz and market share recently. Riverbed Technology pulled away slightly from others in the most recent Magic Quadrant for WAN Optimization Controllers. .

Riverbed Technology (and who doesn’t) has an announcement planned with a partner during RSA San Francisco later this month. Something to do with best-of-breed wide area network (WAN) optimization and public Internet optimization.

"We were under a microscope, and when you are a public company you invest and have to know what the impact is going to be three or four quarters later," said Steve Daheb, Blue Coat's chief marketing officer and senior vice president of corporate and business development. "Now we have the kind of freedom to move quickly and invest where we need to.”

So what is the future for Blue Coat? They brought aboard Gregory Clark as their CEO in September, replacing Michael Borman. In November, they announced that total net revenue for the second quarter of fiscal 2012 was $114.1 million compared with net revenue of $109.5 million in the first quarter of fiscal 2012 and $121.0 million in the second quarter of fiscal 2011. Blue Coat Systems fiscal year isn’t the normal calendar year.

There could be another earnings announcement any day, now. The Thoma Bravo press release trumped an anticipated earnings announcement this week, it appears.

1 comment:

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