UPDATE 2-Double-Take to be acquired by PE firm for $242 mln

Mon May 17, 2010 11:57am EDT

* Says to be bought for $10.55/shr

* Offer price a 9 pct premium

* Shares up as much as 8 pct (Recasts, adds analyst comments, updates shr movement)

By Sayantani Ghosh

BANGALORE, May 17 (Reuters) - Business software maker Double-Take Software Inc DBTK.O said it agreed to be acquired by private equity firm Thoma Bravo LLC for about $242 million in cash.

The offer price of $10.55 a share reflects a premium of 9 percent to the stock's closing price of $9.66 on Friday.

Shares of company, which provides data-replication and storage software, rose almost 8 percent on the news.

The offer is a fair enough price for a PE firm, said Kevin Shea, analyst at MKM Partners. He doesn't see any strategic buyer coming forward with a higher price.

The company's cloud replication product hasn't built up a pipeline yet and the technology isn't breaking new grounds into a high-growth market, he added.

The acquisition will be done through a portfolio company of Thoma Bravo, Vision Solutions Inc, which helps firms recover lost data.

The deal is somewhat of a strategic fit for Vision and Thoma Bravo because they know Double-Take well and have had experience with such software, and so it is not a pure play on a PE buyout, Shea said.

In April the company had said it received unsolicited buyout offers, but had not disclosed any detail. Its shares have risen 11 percent since then.

The deal would not alter the competitive dynamics of the marketplace, but may be indicative of PE buyout activity, analyst Shea said.

"It is indicative of what we are going to see throughout 2010 where you have underperforming companies getting a hard look at by PE firms."

Double-Take expects the transaction to close in the third quarter of 2010, it said in a statement.

Shares of the Southborough, Massachusetts-based company were trading up 6 percent at $10.27 in late morning trade Monday on Nasdaq. They touched a high of $10.40 earlier in the session. (Reporting by Sayantani Ghosh; Editing by Saumyadeb Chakrabarty, Unnikrishnan Nair)

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