In what is the largest buyout in the technology industry this year, Silicon Valley based enterprise software company, Tibco Software has agreed to sell itself for $4.3 billion to Vista Equity Partners.
For Tibco, the sale comes after a difficult and turbulent year. The company has faced declining profits and pressure from activist investors Praesidium Investment Management Co and Starboard Value LP to sell.
Tibco said profit fell to $1.5 million from more than $8.8 million in the period a year earlier. Tibco’s stock has declined 23 percent in 2013.
Tibco Software’s chief executive, Vivek Ranadivé said that as a private company, Tibco will have added flexibility to serve their customers and execute on their long-term strategy. He further stated that they are excited to work with their partners at Vista and enter their next chapter of growth and industry leadership.
Vista will pay $24 per share, 26 percent above Tibco’s closing price of $19.51 on Friday. Vista beat out a number of bidders, including strategic buyers and other buyout firms that were interested in Tibco.
Led by Robert F. Smith, Vista Equity Partners specializes in buying and turning around software companies. The firm has approximately $13 billion in assets under management and has generated some of the best returns of any private equity firm in recent years.
Smith said that they worked hard to make this deal materialize because they understand the tremendous value that Tibco can bring to its customers and the marketplace as a private company. He also stated that they are incredibly excited to help Tibco reach its full potential.
The deal will have to be approved by Tibco shareholders. In 2012, its stock was trading above $30 a share.