digibyte - TIBCO sold to private equity for $4.3 billion
- Summary:
- TIBCO is acquired for $4.3 billion, eyes the future.
TIBCO has announced that it is to be acquired by Vista Equity Partners for $24 per share of $4.3 billion. That's a 26.3% premium on the closing price at 23rd September.
This is not quite the $5 billion the company was rumored to be looking for but close enough given the company's recent performance. From the blurbs:
"The sale of TIBCO to Vista will provide our shareholders with immediate and substantial cash value, as well as a compelling premium, and the Board has unanimously agreed that this transaction is in the best interests of all our stakeholders;" said Vivek Ranadivé, Chairman and CEO of TIBCO.
This deal brings to an end the history of TIBCO as the 'last man standing' as an independent middleware company.
Back in its heyday, TIBCO commanded a valuation in excess of $15 billion. Those were the days when TIBCO's integration middleware was in high demand as businesses attempted to smooth out the 'joins' between the spaghetti soup of acquired software in an effort to make end to end processes a reality. Unfortunately (for TIBCO), middleware became commoditized in the early 2000's and from that point, its long term future was always in doubt.
In recent years, the company attempted to shore up its business with Spotfire, the acquired analytics platform that temporarily halted the slide in growth. Some commenters felt that sales of Spotfire sales were the only thing holding the company up. But that too faltered and more recently, Ranadivé acknowledged that sales execution had fallen below par.
Most recently, TIBCO repositioned Engage as a service. How that fares as a stand alone customer engagement tool is now a matter for the future.
Back channel conversations suggest that Ranadivé had lost interest in the company as he pursued outside interests. The extent to which that is true will be judged from the tone set at the company's keynote at the upcoming TIBCO Now conference.
Regardless, TIBCO has proven to be highly profitable and the current assumption is that the PE owners will be eyeing any inefficiencies in the company's financial structure before pursuing the kind of growth that attracts current tech investors.
The transaction is due to close in the last quarter of the year.