… But Not in Shareholders’ Best Interests …

Shareholder rights attorneys at Robbins Arroyo LLP are investigating the proposed acquisition of Riverbed Technology, Inc. by Teachers’ Private Capital and Thoma Bravo, LLC.  

On December 15, 2014, the two companies announced the signing of a definitive merger agreement. Under the terms of the agreement, Riverbed Technology shareholders will receive $21.00 for each share of Riverbed Technology common stock.

Is Proposed Acquisition Best for Riverbed and Shareholders?
Robbins Arroyo’s investigation focuses on whether the board of directors at Riverbed is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.

As an initial matter, the $21.00 merger consideration represents a premium of only 8.58% based on Riverbed’s closing price on November 13, 2014. This premium is significantly below the average one-month premium of nearly 40% for comparable transactions within the past five years.  Further, the $21.00 merger consideration is below the target price of $22.00 set by an analyst at Robert W. Baird & Co. on October 24, 2014.

On October 23, 2014, Riverbed released its earnings results for its third quarter 2014, reporting strong quarterly earnings. GAAP revenue was $276 million, compared to $262 million in the third quarter of 2013, representing 6% year-over-year growth. It also reported GAAP net income of $11.5 million, or $0.07 per diluted share, compared to GAAP net income of $3.8 million, or $0.02 per diluted share, in the third quarter of 2013. In commenting on these results, Riverbed chairman and CEO Jerry M. Kennelly remarked: “Our ongoing focus to gain increased operating leverage is evident in our Q3 results, delivering earnings per share in-line with our expectations. We’ve started to execute our previously announced restructuring plans to drive further operational improvements and remain committed to delivering profitable growth and enhancing shareholder value.”

Riverbed last traded above the offer price on March 4, 2014, trading as high as $22.26 and closing at $21.33. In the last three years, the company has traded as high as $30.73 on January 26, 2012, closing at $29.92 on the same day.

In light of these facts, Robbins Arroyo is examining Riverbed’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.

Riverbed’s shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.