The Ontario Teachers Pension Plan and an American private equity group called Thoma Bravo are teaming up to buy Silicon Valley-based Riverbed Technology for $3.6 billion.
The company's board has unanimously approved the transaction, which will see Riverbed's existing shareholders receive $21 US in cash for every share they own.
Riverbed makes IT technology, including computer networking equipment. Shares in Riverbed jumped almost 10 per cent on the news, to trade just below the purchase price on Monday afternoon. That's a sign that the market has doubt the deal will go through, or maybe that another higher offer is possible.
Teachers Private Capital, the $15 billion private equity arm of Teachers, will be putting up the money on behalf of the pension plan for 300,000 current and former Ontario teachers.
It's not known how Thoma Bravo and Teachers will divide their new asset, but the transaction is expected to go through in early 2015 — pending shareholder and regulatory approval.
Riverbed began a strategic plan to unlock value after activist shareholders pressured the company to turn around its share price earlier this summer.