(Reuters) - Business software company Progress Software Corp is considering a sale as part of an exploration of strategic alternatives and has spoken to private equity firms about a potential deal, according to people familiar with the matter.
Progress Software is working with investment bank JPMorgan Chase & Co on a limited auction process that was open to only a small number of buyout firms, the people said this week.
A leveraged buyout would be challenging because of the choppy debt markets, and there is no certainty the company’s negotiations with potential buyers will lead to any deal, the people said.
The sources asked not to be identified because the sale process is confidential. Progress Software and JPMorgan declined to comment.
Shares of Progress Software, which has a market capitalization of around $1.2 billion, rose as much as 17 percent on the news. They were up 9 percent at $25.32 in early afternoon Nasdaq trading.
A deal would make Progress Software the latest in a string of business software companies to explore a sale. SolarWinds Inc, Solera Holdings Inc and Informatica Corp were among those that chose to go private last year to accelerate their transition to Internet-delivered services, known as cloud computing.
Based in Bedford, Massachusetts, Progress Software develops tools to manage business applications at a company’s premises or in the cloud.
The company’s stock has declined 20 percent in the last six months, compared with an 11 percent decline in the Nasdaq Composite Index.
Earlier this week, Progress Software said it had revenue of $377.6 million in its fiscal 2015 year, compared with $332.5 million in fiscal 2014. Income from operations was $14.8 million, down from $80.7 million in the prior fiscal year.
Reporting by Liana B. Baker and Greg Roumeliotis in New York; Editing by Dan Grebler