Bluecoat Systems Buys Packeteer

Just a day after we first reported that Cupertino, Calif.-based Packeteer (Nasdaq: PKTR) was in talks with two equipment makers, the company announced it is being acquired by Blue Coat Systems (Nasdaq: BCSI) of Sunnyvale, Calif. The deal is pegged at $7.10 a share — about $268 million in cash. The deal is clearly better than the $5.50 a share offered by Elliott Associates, which wanted to execute a hostile takeover of Packeteer.

BCS CEO Brian NeSmith gives a laundry list of reasons why he is buying Packeteer in this press release. In short, this is about WAN market consolidation, as I had outlined in my previous post. The two companies together have about 35 percent of the WAN optimization market, putting them ahead of Riverbed and Cisco Systems. According to some industry insiders, Riverbed is a likely buyout candidate.