Riverbed Technology has filed for chapter 11 protection with a view to implementing a pre-packaged financial restructuring plan to eliminate debts of $1.1 billion following struggles caused by the pandemic, The Register reported. The SD-WAN and WAN optimization business first signaled an intent to enter into a restructuring support agreement last month, which it said is fully supported by all its voting lenders, as well as private equity majority owners, Thoma Bravo LLP and Ontario Teachers' Pension Plan (OTPP). In court papers filed with the US Bankruptcy Court for the District of Delaware, Riverbed president and CEO Dan Smoot said the "best option" is to "right-size its capital structure and position itself for long-term success." "Like many similar businesses, Riverbed faced significant COVID-19 related headwinds in 2020, including global supply chain disruptions and labor shortages, which adversely affected Riverbed's financial performance," said Smoot in supporting document. "With factories shut down and stay-at-home orders instituted across the globe, Riverbed faced challenges maintaining its global supply chain as well as driving sales through a suddenly fully remote salesforce." The limitations caused by the pandemic and debt obligations — it was bought by Thoma Bravo and OTPP at the end of 2014 for around $3.6bn — "significantly constrained liquidity through 2020," the CEO added. The business, which employs 1,400 staff and sells to more than 30,000 customers, said the "sustained decrease in workforce participation and declined demand during the pandemic for Riverbed's products and services" kept the pressure on liquidity, leading to the exploration of efforts to reduce its debts to its owners.
