Tibco Software, a maker of software for businesses, agreed to be bought by Vista Equity Partners for about $4.3 billion in the biggest U.S. technology buyout this year.
Tibco stockholders will get $24 in cash a share, the Palo Alto-based company said in a statement Monday. That represents a 23 percent premium over the shares’ closing price of $19.51 on Friday. The purchase price includes net debt, which was about $19.8 million as of Aug. 31, according to data compiled by Bloomberg.
The software maker had been pitching its business to potential buyers including private-equity firms earlier this month, according to people with knowledge of the matter. Tibco had begun a strategic review of the company’s options after activist investor Praesidium Investment Management, the company’s sixth-largest shareholder, sent a letter to the board on Aug. 12 seeking a sale.
“It’s a good exit path from the current situation,” said Steven Koenig, an analyst at Wedbush Securities who has a neutral rating on Tibco. The company was in a difficult situation with a deteriorating market position, he said.
Tibco’s CEO and Chairman Vivek Ranadive is also an owner of the Sacramento Kings basketball team. He will receive a $4 million bonus if he stays with Tibco until the deal is completed, according to a filing with the U.S. Securities and Exchange Commission. Ranadive owns a nearly 6 percent stake in Tibco, according to FactSet.
Tibco rose 21 percent to close at $23.65 in New York. The shares have gained 5.2 percent this year.
The deal’s value surpasses the $2.5 billion that private- equity firm Thoma Brav agreed to pay for Compuware earlier this month, the previous largest buyout of a publicly traded tech company this year according to data compiled by Bloomberg.
“Ultimately, the board concluded that the sale alternative was the best alternative, and that Vista’s offer to acquire Tibco is the best way to maximize value for our shareholders,” David West, a member of Tibco’s board, said in today’s statement.
Todd Bradley, the former Hewlett-Packard executive who joined Tibco as president in June, will leave the company, according to a separate regulatory filing on the deal.
Tibco’s shares had fallen in the past two years as revenue growth slowed to about 4 percent in the latest fiscal year ended in November, and profit in the latest quarter fell short of analysts’ estimates.
The company’s revenue continued to underperform because of competition and sales execution issues, Mandeep Singh, a Bloomberg Intelligence analyst, wrote on Aug. 27. Operating margins declined “significantly” amid a slowdown in software- license revenue growth in the last few quarters, Singh said.
Vista Equity, a private-equity firm focused on data, software and technology-enabled businesses and owns several software companies, has offices in Austin, Texas, Chicago and San Francisco.
The deal, which is expected to close in the fourth quarter, will take Tibco private.
Goldman Sachs Group served as Tibco’s financial adviser, while Wilson Sonsini Goodrich & Rosati provided legal advice, according to the statement. Vista’s financial advisers were Bank of America, Deutsche Bank, Jefferies Group, JPMorgan Chase & Co. and Union Square Advisors.
The Associated Press contributed to this report