Blue Coat Acquired by Private Equity Firm
Significant news this week in the Secure Web Gateway market broke as it was announced last Friday that Blue Coat was being acquired by private equity firm Thoma Bravo. Blue Coat was purchased for approximately 1.3 billion US dollars.
Bloomberg is reporting that an investor is suing the Blue Coat for selling the company at an undervalued price. They also report that according to a December 9 regulatory filing that "Blue Coat is looking for $465 million in loans to back the takeover, including a $415 million term loan and a $50 million revolving line of credit..." More details on Bloomberg's take on the Blue Coat acquisition.
In another article on Blue Coat by Bloomberg, Blue Coat is referred to as an "ill patient" after an 81% Q1 profit drop and letting go of CEO Michael Borman in August for failing to meet performance goals.
Daniel Ives, an analyst at FBR Capital Markets & Co. in New York, was quoted as saying "It was clear over 18 months that the product inefficiencies and lack of execution in the field at Blue Coat were not fixable without an outsider doing a serious operation on this ill patient".
It has been sometime since Blue Coat has made significant upgrades to its secure web gateway platform so this news is not that surprising. What is surprising, is that in light of this news, Blue Coat still was ranked in the leaders quadrant in this year's Magic Quadrant for Secure Web Gateway by Gartner.
This brings into question the accuracy of the Magic Quadrant as Blue Coat was placed among leaders such as Websense, Cisco Ironport, and Zscaler. Even visionaries such as M86 Security and Actiance have made significant recent improvements to their secure web gateway platforms where Blue Coat noticably has not.
Those backing the acquisition appear hopeful that Thoma Bravo will be able to help Blue Coat refocus itself and again be a leader in this market. We look forward to seeing a rejuvenated Blue Coat compete and bring improvements and innovations to the secure web gateway field.