Business software maker Tibco Software Inc TIBX.O on Monday agreed to be bought by private equity firm Vista Equity Partners for $4.3 billion, the latest software company to go private after becoming a target for activist investors.
Vista will pay $24 per share in cash for Tibco. That would be a 26 percent premium to the stock's closing price on Sept. 23, the day before Reuters reported that several private equity suitors, including Vista, were vying for Tibco.
Shares of Tibco closed 21.2 percent higher at $23.65.
Tibco, following the likes of Compuware and BMC Software, is the latest enterprise software company to go private. Its board had come under pressure from activist investors Praesidium Investment Management Co LLC and Starboard Value LP.
The Palo Alto, California-based company develops software that companies use in processes such as inventory keeping and cross-selling products.
Tibco's share price has fallen 25 percent in the last 12 months as the company's products, including flagship data platform Spotfire, have come under competitive pressure.
The company, which has been facing declining software revenue, had been reviewing its strategic options since Aug. 16.
"As a private company, Tibco will have added flexibility to serve our customers and execute on our long-term strategy," Chief Executive Officer Vivek Ranadivé said in a statement.
Vista Equity, a technology-focused shop with $13.5 billion in capital commitments, is run by CEO Robert Smith and known for its hands-on approach to running enterprise software companies.
The parties said they expected the deal, which is subject to approval from shareholders and regulators, to close in the fourth quarter.
Tibco board member David West said in a statement that the company had undergone an "extensive process involving a large and diverse group of strategic and financial buyers."
It will pay a $116.7 million breakup fee to Vista if it decides to accept a better proposal.
"We think it is highly unlikely that a higher bidder comes in at this point, given that the search for a buyer has been very public over the last two months," said Wells Fargo analyst Jason Maynard.
Founded in 1997 as a subsidiary of Reuters Holdings Plc with backing from Cisco Systems Inc (CSCO.O), Tibco went public in 1999 under CEO Ranadivé. Thomson Reuters Corp (TRI.TO) is no longer a material shareholder in the company.
Ranadivé, a computer scientist from India and owner of basketball's Sacramento Kings, in 1986 founded Tibco's predecessor, Teknekron Software Systems Inc, where he spearheaded the automation of Wall Street's trading floors. Reuters acquired the company in 1994 for $125.1 million.
Ranadivé will stay on as chairman and CEO until the deal closes, but after that, his future role at the company is not yet clear, according to a source familiar with the matter.
In June, the company named former senior Hewlett-Packard Co (HPQ.N) executive Todd Bradley as president. Bradley left the company on Sunday, it said in a filing.
Goldman Sachs (GS.N) was Tibco's financial adviser. Vista was advised by Bank of America Corp (BAC.N), Deutsche Bank (DBKGn.DE), Jefferies, JP Morgan (JPM.N) and Union Square Advisors. Wilson Sonsini Goodrich & Rosati was Tibco's legal adviser, while Kirkland & Ellis advised Vista.
JP Morgan and Jefferies will provide debt financing to Vista.
(Reporting by Liana B. Baker; Editing by Ted Kerr, Lisa Von Ahn and Richard Chang)