Tibco Software to be acquired by PE firm Vista Equity Partners for $4.3 bn

Infrastructure and business intelligence software provider Tibco today said that it has entered into a definitive agreement to be acquired by Vista Equity Partners, a leading private equity firm focused on software, data and technology-enabled businesses. 

Under the terms of the agreement, Tibco stockholders will receive $24.00 per share in cash, or a total of approximately $4.3 billion, including the assumption of net debt.  The agreement was unanimously approved by Tibco's board of directors.

Palo Alto, California-based Tibco develops software for companies to use on site or through cloud computing. Vista Equity, owner of several software companies, operated offices in Austin, Texas, Chicago and San Francisco.

The deal, expected to close in the fourth quarter, would take Tibco private.

Vista Equity would pay $24 for each Tibco share, a 23-per cent premium to the company's closing price of $19.51 on Friday. With debt included, the two companies valued the deal at about $4.3 billion.

According to a statement by Tibco, in September, its board launched a search for strategic and financial alternatives for the company, before deciding to sell the company as it was the ''best way to maximise value for our shareholders,'' said David West, a member of Tibco's board, in a statement.

Tibco's CEO and chairman Vivek Ranadive also owns the Sacramento Kings basketball team, and would receive a $4 million bonus if he stayed with Tibco until the completion of the deal, according to a filing with the US Securities and Exchange Commission.

According to FactSet, Ranadive owned close to a 6-per cent stake in Tibco.

Tibco, following the likes of Compuware and BMC Software, becomes the latest enterprise software company to go private after its board came under pressure from activist investors Praesidium Investment Management Co LLC and Starboard Value LP, Reuters reported.

Tibco's share price was down 25 per cent in the last 12 months as the company's products, including flagship data platform Spotfire, came under under competitive pressure.

"As a private company, Tibco will have added flexibility to serve our customers and execute on our long-term strategy," chief executive Officer Vivek Ranadivé said in a statement.

Vista Equity, a technology-focused company with $13.5 billion in capital commitments, is run by CEO Robert Smith and is known for its hands-on approach to running enterprise software companies.

According to the parties, they expected the deal, which was subject to approval from shareholders and regulators, to close in the fourth quarter.

Tibco board member David West said in a statement that the company had undergone an "extensive process involving a large and diverse group of strategic and financial buyers."