Tibco Software (NASDAQ:TIBX) surged in today's trading after the business software maker agreed to be sold to Vista Equity Partners, a private equity firm, for $4.3 billion.
Shares increased 22 percent to $23.72 at 1:21 p.m. in New York. The shares had fallen 13 percent this year before today.
Tibco shareholders will receive $24 in cash a share, the Palo Alto, California-based company said in a statement today. That represents a 23 percent premium over the shares’ closing price of $19.51 on Sept. 26.
The purchase price includes net debt, which was about $19.8 million as of Aug. 31.
The agreement comes weeks after Tibco, under pressure from activist investor Praesidium Investment Management Co., unveiled a plan to explore strategic options.
"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 the statement.
Tibco been pitching its business to potential buyers including private-equity firms earlier this month, Bloomberg reported, citing people with knowledge of the matter. Tibco had begun a strategic review of the company’s options after activist investor Praesidium Investment Management Co., the company’s sixth-largest shareholder, sent a letter to the board on Aug. 12 seeking a sale.
Tibco spoke to more than 20 potential buyers, Reuters said, citing a source familiar with the situation. Tibco will pay a $116.7 million breakup fee to Vista if it decides to accept a better proposal.
The deal is the biggest U.S. technology buyout this year. The transaction’s value tops the $2.5 billion that private-equity firm Thoma Bravo LLC agreed to pay for Compuware (NASDAQ:CPWR) earlier this month, the previous largest buyout of a publicly traded tech company this year.
Vista Equity, a technology-focused shop with $13.5 billion in capital commitments, is run by chief executive officer Robert Smith and known for its hands-on approach to running enterprise software companies.
The deal is expected to close in the fourth quarter.
Tibco also said its president, Todd Bradley, will soon leave the company to pursue other opportunities.