Wedbush Raises PT on Blue Coat Systems After Acquisition Announcement

Wedbush Securities has published a research report on Blue Coat Systems (NASDAQ: BCSI) and has raised the price target from $19 to $25.81 following the company's announcement that it will be acquired by private-equity firm Thoma Bravo.

In the report, Wedbush writes, "Company indicated in a press release this morning that they have approved a $1.3bn offer from a PE group led by Thoma Bravo which includes the Ontario Teachers Pension Plan. The $1.3bn offer represents a 48% premium over yesterday's closing price of $17.48. The transaction is expected to close in Q112. Thoma Bravo is actively involved in the security space and recently acquired firewall vendor SonicWall in June 2010. Given the shifting security landscape to solutions which offer multiple capabilities, we think the PE group may eventually combine some of the capabilities of SonicWall and BlueCoat to eventually create a competitive, comprehensive solution in the future – something that would have taken BlueCoat a substantial amount of investment in R&D and time. At the end of the day, the core value of BlueCoat remains a loyal customer base which includes 85% of Fortune 500 companies."

Wedbush maintains its Neutral rating on Blue Coat Systems, which is currently trading