Tibco Software To Be Acquired By Vista Equity Partners In $4.3 Bln Deal

(RTTNews) - Business software maker Tibco Software Inc. (TIBX) said Monday that it has agreed to be acquired by private equity firm Vista Equity Partners for about $4.3 billion, including the assumption of net debt. Shares of Tibco are gaining 21 percent in pre-market activity.

Under the terms of the deal, Tibco stockholders will receive $24 per share in cash. The purchase price represents a 26.3 percent premium to Tibco's closing stock price of $19 on September 23, one day prior to public reports about the company's potential acquisition.

The deal was unanimously approved by Tibco's board of directors following a thorough review of strategic and financial alternatives conducted by a special committee of the board.

The transaction, subject to approval by Tibco's stockholders, is expected to close in the fourth calendar quarter of 2014.

Vivek Ranadivé, chairman and CEO of Tibco said, "We strongly believe that this transaction best positions the Company to execute on our vision of providing the right information, at the right time, in the right context to make the world a better place. Additionally, as a private company, Tibco will have added flexibility to serve our customers and execute on our long-term strategy."

Palo Alto, California-based Tibco makes programs for running corporate-data centers and also provides infrastructure software for companies to use on-premise or as part of cloud computing environment.

In early September, Tibco said it commenced a review of strategic and financial alternatives through the formation of a special committee, following pressure from one of its investors to explore a sale.

Praesidium Investment Management Co., which owns over 3 percent of Tibco's stock, had sent a letter to Tibco's board, asking the company to commence a review and to explore a potential sale of the company.

Vista Equity Partners is a private equity firm with over $13.5 billion in cumulative capital commitments, focused on investments in software, data and technology-enabled companies.

Vista has a track record of successfully completing take-private transactions, including taking five other public companies private in the past three years.

There are no financing conditions associated with the proposed agreement. JPMorgan Securities LLC and Jefferies Finance LLC have provided committed debt financing to Vista Equity Partners in connection with the transaction.

In mid-September, Tibco reported a sharp decline in profit for the third quarter, hurt largely by lower revenues, poor margins and higher operating costs.

Tibco's third-quarter net income dropped to $2.6 million or $0.02 per share from $21.3 million or $0.13 per share in the same period last year. Revenues for the quarter declined to $255.6 million from $270.9 million in the year-ago period.

Goldman, Sachs & Co. is serving as financial advisor to TIbco, and Wilson Sonsini Goodrich & Rosati, Professional Corporation is serving as its legal advisor.

For Vista, BofA Merrill Lynch, Deutsche Bank Securities Inc., Jefferies LLC, JPMorgan Securities LLC and Union Square Advisors LLC are serving as financial advisors, while Kirkland & Ellis LLP is serving as legal advisor.

TIBX closed Friday's trading at $19.51. In Monday's pre-market activity, the stock is up $4.14 or 21.22 percent to $23.65.