U.S. network security firm Infoblox Inc (BLOX.N) has launched a process to sell itself after it received buyout interest from private equity firms and it came under pressure from activist fund Starboard Value LP, people familiar with the matter said.
Were Infoblox to agree a sale to a buyout firm, it would be the latest in a string of business software companies to go private this year, often after they come under criticism from activist investors over their poor financial performance.
Thoma Bravo LLC, which had approached the company earlier this year about a potential acquisition, is one of the buyout firms that are participating in an auction for Infoblox, the people said this week, cautioning that no deal is certain.
The sources asked not to be identified because the deliberations are confidential. Infoblox declined to comment, while Thoma Bravo did not immediately respond to a request for comment.
Shares of Infoblox rose as much as 10 percent on the news and were up 6.5 percent at $21.45 in afternoon trading in New York on Wednesday, giving the company a market capitalization of around $1.2 billion.
Santa Clara, California-based Infoblox helps companies automate their information technology networks and protect them from cyber attacks. It generated revenue of $82 million in the third fiscal quarter, up 5 percent year-on-year, and is set to report its fourth-quarter earnings after the U.S. stock market closes on Wednesday.
The company has said previously that weakness in information technology spending across the technology industry has hurt its performance.
Starboard, which played a key role in pushing Yahoo Inc (YHOO.O) this year to sell its core internet assets to Verizon Communications Inc (VZ.N), disclosed a 7.1 percent stake in Infoblox in April, stating that the company’s shares were undervalued and represented an attractive investment opportunity.
Starboard also said it could engage in talks with Infoblox about potential transactions.
In the latest major private equity deal in the technology sector, U.S. data analytics firm Qlik Technologies Inc QLIK.O agreed in June to be taken private by Thoma Bravo for about $3 billion, after being pressured into a sale by activist hedge fund Elliott Management Corp.