Shares of New Relic Inc.
NEWR,
shot up 12.8% in premarket trading Monday, after the “observability” platform for software engineers announced a deal to be acquired by investment firms Francisco Partners and TPG Inc.
TPG,
in a deal valued at about $6.5 billion. Under terms of the deal, each New Relic share would be exchanged for $87 in cash, which represents a 17.5% premium to Friday’s closing price of $74.05. The buyout bid price would imply a market capitalization for New Relic of $6.11 billion. The deal is expected to close in late 2023 or early 2024. New Relic said the deal includes a 45-day “go-shop” period in which alternative acquisition proposals can be solicited. The stock has gained 3.6% over the past three months through Friday while the S&P 500
SPX,
has gained 9.9%.
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