Tibco goes private for $4.3 billion

Tibco Software announced today that equity firm Vista Equity Partners will take it private for about $4.3 billion.

Shareholders will receive $24 a share in cash, and the deal, which the shareholders must approve, includes the assumption of net debt.

The Palo Alto, Calif.-based company said its board of directors unanimously approved the sale after a “thorough review of strategic and financial alternatives.”

“As a private company, Tibco will have added flexibility to serve our customers and execute on our long-term strategy,” chairman/CEO and founder Vivek Ranadivé said in a statement.

Vista, which is oriented toward acquiring and turning around software and data companies, will be paying a 26.3 percent premium over the closing price of Tibco common stock on September 23. On the 24th, news reports indicated that multiple firms were making offers for the company. Reuters reports that Tibco spoke with nearly two dozen companies about a possible buyout.

The valuation is over 18 times Tibco’s EBITDA (earnings before interest, depreciation, and amortization) for 12 months prior to August 31 of this year.

Tibco started in 1997, initially as a subsidiary of Reuters Holdings Plc. In 1999, it went public, with Ranadivé as CEO. The company’s software products track processes such as inventory and product cross-selling in real time. Tibco has also expanded its product line into marketing.

In the summer, investment firm and shareholder Praesidium Investment Management started calling for the company to be sold. The company’s profit plummeted to $1.5 million in its most recently completed quarter, compared to over $8.8 million for the same quarter a year ago. The stock price has dropped by nearly a quarter of its price over the last year.

“The fact that they sold themselves to Vista is a big deal,” Information Technology Intelligency Corp analyst Laura DiDio told VentureBeat. The investment firm obviously “must think that their products and intellectual property are worth” the valuation and that the company can be turned around, she said.