Francisco Partners, TPG Taking New Relic Private in $6.5 Billion Acquisition

Francisco Partners and TPG are acquiring New Relic in an all-cash deal valued at $6.5 billion. At closing, New Relic will become a private company.

The purchase price represents a 26% premium over New Relic’s 30-day average closing price, the company said. New Relic‘s software helps websites and applications track performance.

The transaction should close in late 2023 or early 2024, subject to the satisfaction of customary closing conditions and certain regulatory items.

Bill Staples, New Relic‘s CEO, said his company has made significant progress on its consumption business transition, “and together with Francisco Partners and TPG, we will have the resources and flexibility to not only complete the final chapter of this transition, but also accelerate our strategy and provide customers with a standardized data-driven practice that any company can benefit from.”

New Relic’s Bill Staples

“I am proud of all that the team at New Relic has achieved, and I thank each of our employees for executing in a dynamic market and contributing to our continued success,” he said.

In a blog, Staples said this change in ownership does not change New Relic’s strategy, “who we are or how we do business or with you.”

“As before, we retain the same vision and values that have always driven us, and the same love for software, our customers and your success,” he said.

Francisco Partners ‘Always Admired’ New Relic

Once complete, New Relic will become a private company with enhanced flexibility to continue investing in its observability platform, and meeting the data and efficiency needs of its customers.

“We’ve always admired New Relic’s best-in-class technology platform and New Relic’s continued commitment to provide its customers with a product that continually exceeds expectations,” said Dipanjan Deb, Francisco Partners’ co-founder and CEO.

Under the terms of the agreement, New Relic may solicit alternative acquisition proposals from third parties during a 45-day “go-shop” period following the date of execution of the merger agreement. New Relic’s board of directors will have the right to terminate the merger agreement to enter into a better proposal subject to the terms and conditions of the merger agreement. There are no assurances that the “go-shop” will result in a better proposal.

TPG will invest in New Relic through TPG Capital, the firm’s U.S. and European late-stage private equity platform.

“As technology continues to become more feature rich and AI-enabled, the need for visibility is only increasing,” said Nehal Raj, co-managing partner of TPG Capital. “New Relic is a pioneer in the observability market, providing developers and engineers with a unified platform to proactively monitor and manage mission critical applications.”