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Bain to Buy Blue Coat for About $2.4 Billion

The deal comes amid strong demand for cyber security technology.

Bain Capital will acquire Blue Coat Systems from fellow private equity firm Thoma Bravo in a deal that the network security company said on Tuesday would value it at about $2.4 billion, including debt.

The deal comes amid strong demand for cyber security technology following a spate of high-profile breaches that have crippled businesses and rattled conglomerates such as Sony and Target.

“This is a land-grab market opportunity, and private equity as well as larger tech players, have a strong appetite for vendors that play in this $15 billion to $20 billion market opportunity,” said FBR Capital Markets analyst Daniel Ives.

Blue Coat, which San Francisco-based Thoma Bravo took private in February 2012 for $1.3 billion, operates in an area where businesses and governments are increasing their spending to counter and contain cyber security threats.

Its products are used to speed up data flow over the Internet and block inappropriate websites and cyber attacks.

“The world’s most trusted brands use Blue Coat, and the acquisition by Bain Capital sets us on the trajectory to further grow our portfolio, better serve our customers and help us prepare to return to the public markets,” Blue Coat Chief Executive Officer Gregory Clark said in a statement.

Since going private, Blue Coat has increased its scale through a number of acquisitions. These have included anti-malware company Norman Shark; Solera Networks, which uses data mining to detect potential security threats; and Netronome’s SSL technology, which helps inspect Internet traffic.

Goldman Sachs and Wilson Sonsini Goodrich & Rosati are advising Blue Coat.

Jefferies is advising Bain and providing debt financing for the deal. Ropes & Gray is legal counsel, and PwC is accounting adviser to the private equity firm.

(Reporting by Greg Roumeliotis in New York; Additional reporting by Jim Finkle in Boston and Liana B. Baker in New York; Editing by Chizu Nomiyama and Lisa Von Ahn)

This article originally appeared on Recode.net.