Blue Coat Said to Take IPO Pitches 9 Months After Bain Takeover

  • Major cyber attacks spur interest in Internet security assets
  • Public offering would be second quick exit for PE backers

Blue Coat Systems Inc., a provider of Internet security software, is taking pitches from investment banks for an initial public offering just nine months after being acquired by private equity firm Bain Capital Partners LLC, people familiar with the matter said.

An IPO could come as early as the second quarter of 2016, the people said, asking not to be named because the discussions are private. No final decision has been made and Bain may choose not to proceed with an offering, the people said.

If Blue Coat sells shares next year, it would be the second time the company’s private equity backers have chosen to exit in a quick time frame. Bain agreed to buy the Sunnyvale, California-based company in March for $2.4 billion from Thoma Bravo, which took the tech company private in 2012 in a $1.3 billion transaction. Buyout firms typically hold assets for around five years.

Internet security is high on corporate America’s list of concerns as companies from JPMorgan Chase & Co. to American Airlines Group Inc. suffered major cyber attacks in recent years. Blue Coat provides online security tools including real-time threat analytics for smartphones and Web gateway technology, which are devices that funnel companies’ Internet traffic to scan for hacking threats.

Representatives from Blue Coat didn’t immediately respond to requests for comment. Officials at Bain weren’t immediately available to comment.

In the past three years, investments in U.S. Internet security companies by private equity firms has increased more than sixfold to $13.9 billion for 107 deals, from $2.1 billion for 70 deals in the previous three-year period, according to data compiled by Bloomberg. Meanwhile, only three of these companies have gone public since December 2012.

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