Vista Equity Takes Tibco Private for $4.3B After Activist Push

NEW YORK ( The Deal) -- Vista Equity Partners said Monday it agreed to acquire Tibco Software ( TIBX)  for $24 per share, in an all cash deal that values the infrastructure and business software company at $4.3 billion.

Palo Alto, Calif.-based Tibco said in earlier this month that it hired Goldman, Sachs & Co. and Wilson Sonsini Goodrich & Rosati PC to assist in a strategic review as its Spotfire data analytics software unit has struggled. Tibco formed a special committee on August 16.

David West, who sits on the special committee of Tibco's board, said that the company engaged with "a diverse group of strategic and financial buyers."

A representative for Texas-based Vista said the deal would close in the fourth quarter. The private equity firm and the company declined further comment.

The deal represents a 26% premium on Tibco's shares, and 18 times the company's Ebitda, the companies said.

With Tibco shares down about 13% this year, market watchers noted that Tibco has underperformed. In its most recent quarter, profit fell to $1.5 million, from more than $8.8 million for the same quarter in 2013.

Tibco's middleware business develops software that allows applications to connect to legacy databases and programs. The company has looked to its Spotfire data analytics arm for growth, but the business has faltered in recent quarters.

Tibco purchased Spotfire for $195 million in 2007. Spotfire had double-digit sales growth from 2010 to 2013, but has struggled in recent quarters.

Chairman and CEO Vivek Ranadive blamed the company's approach to marketing Spotfire. Ranadive, who purchased the National Basketball Association's Sacramento Kings franchise last year, denied that his endeavors in sports distracted him from the business.

Activist shareholder Praesidium Investment Management Co. LLC took a stake in Tibco in June.

Prior reports regarding the Tibco auction indicated the company had received several bid from other private equity firms. Large tech groups such as IBM ( IBM) , Oracle ( ORCL)  or SAP ( SAP)  were considered possible suitors, though a breakup of the company was also possibility.

Meanwhile, several sources confirmed Vista is concluding a fundraising process for its biggest vehicle ever. It raised nearly $4 billion for the fund's first close and is expected to top the $5 billion mark for its fifth fund, which will bring total assets under management past the $13 billion mark.

Tibco's buyout comes at a time when buyout shops have raised substantial capital for new tech-focused funds, yet, simultaneously, as they often find themselves struggling to take on public market auctions.

In a recent deal, several sources said numerous private equity firms bid for Concur Technologies ( CNQR) , only to see their offers topped -- either financially, or, alternatively because of strategic reasons -- by German business software firm SAP.

JPMorgan Securities LLC and Jefferies Finance LLC committed debt financing for the Tibco buyout.

Pawan Tewari and Tom Ernst of Goldman Sacs and Wilson Sonsini Goodrich & Rosati lawyers including Larry W. Sonsini and Bradley L. Finkelstein advised Tibco.

A Bank of America Merrill Lynch team of Jack MacDonald, Kevin Morrison, Sarang Gadkari, Doug Ingram and Michael Altmin advised Vista. Deutsche Bank Securities Inc., Jefferies LLC, JPMorgan Securities LLC and Union Square Advisors LLC also provided financial advice.

Kirkland & Ellis LLP's David Breach, Sarkis Jebejian, Stuart Casillas and Joshua Zacharia provided legal counsel to Vista.

-- Also by Chris Nolter.

If you liked this article you might like

Clouds With a Golden Lining: Enterprise Software Targets

Jim Cramer's 'Mad Money' Recap: Don't Leave Gains on the Table

How Will Tibco Software (TIBX) Stock Respond to These Mixed Analyst Actions?

How to Trade the Market's Most-Active Stocks: JNS, PBR, TIBX, ATHL

Jim Cramer's 'Mad Money' Recap: Use the Volatility to Make More Money