NEW YORK (TheStreet) -- Shares of Riverbed Technology (RVBD) are up 9.07% to $20.44 on heavy trading volume after the San Francisco, CA-based telecommunications equipment company agreed to be acquired by private equity firm Thoma Bravo LLC for about $3.6 billion, the Wall Street Journal reports.

Riverbed shareholders will receive $21 a share under the deal, matching a previous offer from activist shareholder Elliott Management Corp., which said it supports the transaction, according to the Journal.

Riverbed Chief Executive Jerry Kennelly said in a statement Monday that the deal follows a "thorough strategic review, during which we assessed a wide variety of options to maximize value, the board unanimously concluded that partnering with Thoma Bravo was the best choice for Riverbed," the Journal added.

About 6.17 million shares changed hands by 10:23 a.m. in New York, compared to the average of 1.27 million shares.

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Separately, TheStreet Ratings team rates RIVERBED TECHNOLOGY INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate RIVERBED TECHNOLOGY INC (RVBD) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and good cash flow from operations. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 5.6%. Since the same quarter one year prior, revenues slightly increased by 5.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 200.8% when compared to the same quarter one year prior, rising from $3.82 million to $11.48 million.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • The gross profit margin for RIVERBED TECHNOLOGY INC is currently very high, coming in at 84.87%. Regardless of RVBD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, RVBD's net profit margin of 4.15% is significantly lower than the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Communications Equipment industry and the overall market on the basis of return on equity, RIVERBED TECHNOLOGY INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • You can view the full analysis from the report here: RVBD Ratings Report

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