Blue Coat in $268M deal for Packeteer by Scott Moritz @FortuneMagazine April 21, 2008, 1:21 PM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons By Scott Moritz, writer Packeteer’s white knight arrived in a Blue Coat. Network security shop Blue Coat (BSCI) says it will pay $268 million in cash for Packeteer (PKTR). The deal calls for Blue Coat to pay $7.10 a share for the Internet traffic management outfit — a 15% premium over the closing price Friday. As part of the deal, Blue Coat will buy the 10% Packeteer stake held by private-equity firm Elliot Associates. Packeteer had rejected a $200.8 million takeover offer from Elliott earlier this year. In the new deal, Blue Coat will issue $80 million in convertible notes to Francisco Partners, a unit of Elliot Associates. Packeteer, known as a wide-area-network optimization shop, uses software and hardware to speed up transmission of data communications. Packeteer and rival Riverbed RVBD have seen a steady decline in sales growth in the last year as tech spending slows. Riverbed is down 58% in the past year. And prior to the deal, shares of Packeteer were down 36% since last year. Packeteer rose 12%, to $6.96, in premarket trading Monday.