Thoma Bravo and OTPP seal $1.3bn software deal

The investment in Blue Coat Systems is Thoma Bravo’s fifth security technology platform investment and second investment alongside the Ontario Teachers’ Pension Plan.

Thoma Bravo and the Ontario Teachers’ Pension Plan have teamed up to purchase Nasdaq-listed online security company Blue Coat Systems for approximately $1.3 billion.

The transaction value represents about a 48 percent premium compared to Blue Coat’s closing price on 8 December. A spokesperson for Thoma Bravo told Private Equity International Blue Coat’s growth prospects were “very attractive”, with annual growth rates “north of 10 percent for their core secure web gateway market”.

Thoma Bravo’s $823 million ninth fund is more than 80 percent invested. The firm launched its tenth fund targeting $950 million in September, according to PEI Media research provider Private Equity Connect.

OTPP invested in Blue Coat through its private investor division, Teachers’ Private Capital.

The Blue Coat transaction marks Thoma Bravo’s fifth platform investment in the security technology sector and its second alongside OTPP. In July 2010, the two groups teamed up on a $717 million investment in IT security and data backup company SonicWall.

Thoma Bravo and OTPP have done business together more recently, however. In July, Thoma Bravo sold software licensing company Flexera to OTPP, generating a 4.6x return multiple, according to industry sources.

In addition to the investment in Blue Coat, Teachers’ Private Capital also agreed to sell its 79.5 percent stake in Maple Leaf Sports and Entertainment Friday to Bell and Rogers Communications for C$1.32 billion (€969 million; $1.29 billion), based on an enterprise value of just over C$2 billion.