TPG teamed up with Francisco Partners to acquire New Relic in a take-private transaction that values the San Francisco-based analytics provider at $87 per share, or about $6.5 billion.
The move comes a few months after TPG closed its TPG Tech Adjacencies II fund with $3.4 billion in commitments for technology investments. “Digital infrastructure management is a key thematic focus area for TPG, and we’re excited to partner with New Relic to grow the company’s customer relationships and continue enhancing its product capabilities,” said TPG’s Art Heidrich.
Francisco Partners had about $23 billion in dry powder to capitalize on new technology opportunities after raising $17 billion in capital commitments across two oversubscribed funds in July 2022, putting it among the alts firms with the alts firms with the largest asset raises for the 12 months ending March 31, 2023, according to the AW Research 2023 Manager Compendium. “We continue to see tremendous opportunity for New Relic given their unique position in an evolving industry, and as a private company we believe they will achieve their full potential and optimize observability,” said Brian Decker and Evan Daar, partners at Francisco Partners.
The transaction was approved by the New Relic board of directors and is expected to close either late in the year or in early 2024, subject to customary conditions. Lew Cirne, HMI Capital Management and activist investor JANA Partners, which own about 20% of New Relic’s outstanding shares, have formalized their support of the deal. “We have appreciated the partnership with New Relic’s directors and management team over the past few years as the company has executed its business model transformation and achieved profitable growth,” said RK Mahendran of HMI Capital Management, and Kevin Galligan of JANA Partners, who are part of the New Relic board of directors.
