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Tibco goes to private equity firm for $US4.3 billion

Tibco goes to private equity firm for $US4.3 billion

Middleware firm Tibco announced earlier this month it was considering financial alternatives

Just weeks after Tibco said it was looking at its long-term business options, the business intelligence software and middleware vendor has disclosed that it will be acquired by private equity firm Vista Equity Partners.

Visa Equity Partners will pay Tibco stockholders US$24 per share, making the deal worth about $US4.3 billion. Tibco's board has unanimously approved the deal.

A week ago, Tibco stock was trading at less than $US20 per share, but the price rose to more than $US23 per share following news of the sale. A year ago, its stock was trading at nearly $US26 per share.

Tibco's revenue has grown in recent quarters, but its stock price had dropped as the company missed analyst estimates and saw shrinking profits. Earlier this month, Tibco confirmed it was looking at strategic and financial alternatives following news reports that it was exploring a sale.

Tibco had been subject of sale rumours for years, often linked to SAP as a potential buyer.

It's unclear what Vista will do with Tibco, said Holger Mueller, principal analyst with Constellation Research. "Now we will have to see if Vista will give Tibco time to re-invent itself or if it may sell of pieces -- only time will tell," he said by email. "But by taking Tibco private the vendor now has the chance to do investment and re-structuring without quarterly scrutiny by the financial markets."

The sale to Vista also means SAP lost out on a chance to "pivot more" in the software market, he added. "That opportunity is now gone, so it will be more about enterprise applications with SAP going forward," he said.

Tibco sells a wide range of middleware and has been pumping up its analytics business, including the Spotfire data-discovery tool that competes with Tableau. Earlier this year, Tibco acquired open source business intelligence vendor Jaspersoft.

The deal will give Tibco stockholders "immediate and substantial cash value," Vivek Ranadivé, Tibco's chairman and CEO said.

Tibco's special committee looking at strategic and financial alteratives considered several options and found Vista's offer the most compelling, said David West, a member of the company's board.

Vista has more than $US13.5 billion invested, and the company focuses on software, data and other technology companies.

Under the acquisition deal, Vista's purchase price represents a 26.3 per cent premium to the closing price of Tibco common stock last Tuesday, one day before news reports that multiple companies were interested in acquiring Tibco.

The transaction, expected to close in the fourth quarter, is subject to stockholder and regulatory approval.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is grant_gross@idg.com.

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Tags business issuesConstellation ResearchHolger MuellerDavid WestmiddlewareVista Equity PartnerssoftwaretibcoMergers and acquisitionsVivek Ranadivé

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