New Relic Agrees to $6.5 Billion Acquisition by Francisco Partners and TPG

New Relic, an observability platform for engineers, has agreed to be acquired by private equity firms Francisco Partners and TPG Capital for an equity value of approximately $6.5 billion.

Upon completion of the transaction, New Relic will become a private company “with enhanced flexibility to continue investing in its leading observability platform,” the companies said in a Monday (July 31) press release.

“The board is unanimous in its belief that today’s transaction appropriately reflects the company’s innovative and strong business while maximizing shareholder value, and I am immensely proud to have worked alongside New Relic’s outstanding management team and my fellow directors to transform New Relic at this pivotal time,” Hope Cochran, lead independent director of the New Relic board, said in the release.

This will be the software industry’s second-largest take-private deal of the year, behind the $12.5 billion valuation achieved when Silver Lake and the Canada Pension Plan Investment Board agreed to take Qualtrics private, Bloomberg reported Monday.

The acquisition will be an all-cash deal and, upon completion, shareholders will receive a purchase price of $87 per share, according to the press release.

Nehal Raj, co-managing partner of TPG Capital, said in the release that as the technology industry continues to become more innovative, the need for visibility is increasing.

“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,” he said in the release.

Art Heidrich, technology investor at TPG, outlined the long-term vision of the private firm.

“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,” he said in the release.

In other acquisition news, online home furnishing seller Overstock.com completed its $21.5 million buyout of Bed Bath & Beyond’s intellectual property in June, and with it, took the failed retailer’s name.

“We saw real value in the brand and the customer list,” Overstock CEO Jonathan Johnson told PYMNTS in an interview published Monday. “It’s an iconic brand that we wanted to save. It’s a customer list that matches well with ours — not a lot of overlap, but the demographic is someone that’s with us.”