Vista seals TIBCO mega-deal

Vista's take-private of the US software business is one of the biggest deals this year

 Vista Equity Partners has agreed to take NASDAQ-listed enterprise software company TIBCO private, in a deal that values the business at $4.3 billion.

Vista, which specialises in buying software and technology-enabled businesses, has offered $24.00 per share, which equates to a premium of about 23 percent to TIBCO's closing price on Friday, and a 26 percent premium to the price before rumours of a sale became public. It also represents an enterprise value of 18 times TIBCO’s EBITDA for the 12 months ending August 31 2014, TIBCO said.

“In reviewing the sale alternative, TIBCO engaged in an extensive process involving a large and diverse group of strategic and financial buyers,” said TIBCO director David West. “Ultimately, the Board concluded that the sale alternative was the best alternative, and that Vista’s offer to acquire TIBCO is the best way to maximise value for our shareholders.”

In its latest quarterly earnings report, TIBCO said its net income fell to $2.6 million in its fiscal third quarter, well down on the $21.3 million figure recorded during the same period a year earlier.

The company, whose shares have lost more than 20 percent of their value in the last year, said going private would give TIBCO “added flexibility to serve our customers and execute on our long-term strategy”.

According to data provider Dealogic, if the deal goes ahead it would be the 13th biggest transaction so far in 2013.

JPMorgan and Jefferies have committed to provide debt financing.

San Francisco-based Vista, led by CEO Robert Smith, has $13.5 billion under management. It is currently raising its fifth flagship buyout fund, which according to earlier reports has a nominal target of $3.5 billion but is likely to raise well over $5 billion.