New Relic, a well-known software analytics company, has been acquired by Francisco Partners and TPG for a whopping $6.5 billion. This significant deal highlights the growing demand for cloud-based monitoring and analytics tools.
The acquisition is expected to help New Relic expand its global reach and offerings, allowing it to better serve its customers.
Acquisition Details
The acquisition of New Relic by Francisco Partners and TPG is a significant deal worth $6.5 billion.
The acquisition price is $87.00 per share, a premium of approximately 26 percent over New Relic's 30-day, volume-weighted average closing price ending July 28.
The deal is an all-cash transaction, with Francisco Partners and TPG paying $87.00 per share to buy New Relic.
New Relic's common stock has ceased trading and is no longer listed on the New York Stock Exchange.
The transaction is expected to close in late 2023 or early 2024, subject to shareholder approval and customary closing conditions.
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Francisco Partners is a leading global investment firm that specializes in partnering with technology and technology-enabled businesses.
TPG is a leading global alternative asset management firm with $212 billion of assets under management.
The acquisition will make New Relic a privately-owned company with enhanced flexibility to continue investing in its leading observability platform.
New Relic's CEO, Bill Staples, believes the acquisition will allow the company to accelerate its strategy and provide customers with a standardized data-driven practice.
The acquisition agreement was previously disclosed on July 31, 2023, and approved by New Relic stockholders at a special meeting held on November 1, 2023.
Morgan Stanley & Co. LLC acted as lead financial advisor to Francisco Partners and TPG in the acquisition.
The acquisition marks a significant milestone for Francisco Partners, which has invested in more than 400 technology companies since its launch over 20 years ago.
Francisco Partners has approximately $45 billion in capital raised to date, and the firm invests in opportunities where its deep sectoral knowledge and operational expertise can help companies realize their full potential.
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Financials
New Relic's acquisition has significant implications for the company's financials. The deal was valued at $17.6 billion, making it one of the largest tech acquisitions of the year.
This massive investment will likely have a major impact on New Relic's revenue growth. The company is expected to see a significant increase in its revenue, driven by the addition of Freshpaint's capabilities.
New Relic's customer base is also expected to expand with the acquisition, providing a boost to the company's subscription revenue. Freshpaint's customers will now have access to New Relic's full suite of products, increasing its customer base and revenue.
The acquisition is also expected to improve New Relic's gross margin, as the company will be able to leverage Freshpaint's technology to reduce costs and increase efficiency. This will result in higher profit margins for New Relic.
New Relic's acquisition of Freshpaint is a strategic move to expand its offerings and improve its financial performance. The deal is expected to drive long-term growth and increase shareholder value.
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Buyers and Acquisition
Francisco Partners and TPG have completed their acquisition of New Relic, a leading observability platform, for $6.5 billion.
The acquisition was led by Morgan Stanley & Co. LLC, who acted as the lead financial advisor to Francisco Partners and TPG.
The firms also received advice from Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, and Moelis & Company.
Davis Polk & Wardwell LLP, Paul Hastings LLP, and Kirkland & Ellis LLP acted as legal counsel to Francisco Partners and TPG.
Francisco Partners is a leading global investment firm that specializes in partnering with technology and technology-enabled businesses.
TPG is a leading global alternative asset management firm with $212 billion of assets under management.
New Relic's common stock has ceased trading and is no longer listed on the New York Stock Exchange.
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Frequently Asked Questions
Why did New Relic go private?
New Relic went private to speed up its business model transformation and expansion plans. The acquisition by Francisco Partners and TPG provided the necessary resources to achieve this goal.
Does New Relic pay well?
Yes, New Relic pays its employees well, with an average salary of ₹40.1 lakhs. Salaries range from ₹32.6 lakhs to ₹86.8 lakhs, indicating a significant compensation package.
How much funding did New Relic get?
New Relic has secured a total of $196 million in funding across 8 rounds. This significant investment has helped fuel the company's growth and innovation.
Sources
- https://newrelic.com/press-release/20231108
- https://www.crn.com/news/software/observability-vendor-new-relic-going-private-in-6-5b-acquisition
- https://www.davispolk.com/experience/francisco-partners-and-tpg-65-billion-acquisition-new-relic
- https://www.pymnts.com/acquisitions/2023/new-relic-agrees-6-billion-dollar-acquisition-francisco-partners-tpg/
- https://www.cnbc.com/2023/07/31/francisco-partners-tpg-to-take-new-relic-private-in-6-billion-deal.html
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