New Relic shares increased 13% in trading to nearly $84 after the announcement of Francisco Partners and TPG willing to buy it

August 2, 2023: On Monday, New Relic shares increased 13% in trading to nearly $84 after the announcement of Francisco Partners and TPG willing to buy it.

The company said the offer means a 26% premium to New Relic’s 30-day volume-weighted average closing price. New Relic builds software to help websites and applications track performance.

The deal is anticipated to close by early 2024, the company said. It will return New Relic to personal ownership almost nine years after it debuted on the New York Stock Exchange in 2014.

“We are pleased to partner with Francisco Partners and TPG, who are committed to continuing to build upon New Relic’s strong foundation and achieve its full possibility,” New Relic founder and Executive Chairman Lew Cirne said in a release.

Reuters reported in May that Francisco Partners and TPG had ended deal talks after failing to secure enough debt financing to meet New Relic’s desired valuation. The resurrected transaction was announced concurrently with New Relic’s earnings report.

Since that report, the private equity groups have obtained financing and met New Relic’s valuation requirements. Major shareholders, including Cirne and activist hedge fund Jana Partners, have signed off on the deal.

Under the terms of the agreement, New Relic will have a 45-day “go-shop” period, during which it can entertain offers from other qualified bidders.

TPG is an alternative asset manager with assets worldwide, including Airbnb, Box, and Zscaler.

Francisco Partners is a technology-focused private equity firm with past investments in Barracuda Networks, On Semiconductor, and K2. In recent years, the firm has taken other cloud and IT companies private, including a $1.7 billion deal for Sumo Logic and a 2018 deal for payment technology company Verifone.