Software provider New Relic has signed a definitive agreement to be acquired by Francisco Partners and TPG in a deal valued at $6.5bn.
Francisco Partners and TPG have agreed to pay a price of $87 per share, representing a premium of around 26% to New Relic’s 30-day volume-weighted average closing price on 28 July 2023.
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Upon completion of the acquisition, which is anticipated to happen by late this year or early 2023, New Relic will become a private entity.
San Francisco, California-based New Relic is engaged in offering cloud-based solutions to enable websites and mobile applications to monitor servers and databases, besides tracking user interactions to enhance efficiency.
The company’s board of directors has approved the deal.
New Relic CEO Bill Staples said: “New Relic has made significant progress on its consumption business transition and, together with Francisco Partners and TPG, we will have the resources and flexibility to not only complete the final chapter of this transition but also accelerate our strategy and provide customers with a standardized data-driven practice that any company can benefit from.”
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By GlobalDataLew Cirne, JANA Partners, and HMI Capital Management, shareholders of New Relic who collectively own around 20% of the company’s outstanding shares, have also signed agreements in favour of the deal.
About 40% of Cirne’s beneficial shareholdings will be rolled over as part of this deal.
As per the terms of the agreement, New Relic will have a 45-day “go-shop” window to seek alternative purchase proposals.
Francisco Partners partners Brian Decker and Evan Daar said: “We continue to see tremendous opportunity for New Relic given their unique position in an evolving industry, and as a private company we believe they will achieve their full potential and optimize observability.”
TPG Capital co-managing partner Nehal Raj said: “As technology continues to become more feature rich and AI-enabled, the need for visibility is only increasing.
“New Relic is a pioneer in the observability market, providing developers and engineers with a unified platform to proactively monitor and manage mission-critical applications.”
