New Relic Going Private
In a major development in the tech industry, New Relic, a renowned software provider specialising in performance tracking for websites and applications, has announced its plan to go private under the leadership of a consortium led by Francisco Partners and TPG. The all-cash offer, priced at $87 per share, places New Relic’s valuation at a significant $6.5 billion. Following the announcement, New Relic’s stock surged 13% in morning trading, reaching nearly $84 per share, reflecting investor optimism about the deal’s potential. The $87-per-share offer represents a substantial 26% premium to New Relic’s 30-day volume-weighted average closing price, as stated by the company. The acquisition is expected to conclude by early 2024, marking New Relic’s return to private ownership after nearly nine years of being listed on the New York Stock Exchange since its debut in 2014.
Founder and Executive Chairman of New Relic, Lew Cirne, expressed satisfaction with the partnership with Francisco Partners and TPG, emphasising their commitment to building upon the company’s strong foundation and unlocking its full potential. The deal was further bolstered by the endorsement of major shareholders, including Cirne and activist hedge fund Jana Partners, who have given their approval for the acquisition. To ensure transparency and fair market competition, New Relic will undergo a 45-day “go-shop” period, during which other qualified bidders will have the opportunity to present their offers. Overall, this acquisition marks a significant milestone for New Relic as it embarks on a new chapter under private ownership, potentially opening exciting opportunities for growth and innovation in the tech industry. Financial markets will undoubtedly keep a close eye on how the company evolves under the guidance of Francisco Partners and TPG.
What do you think about the situation with New Relic, and is taking this company private a good move?
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.