Francisco Partners and TPG to acquire observability platform New Relic for $6.5bn

Technology investment leaders, Francisco Partners and TPG, have agreed to purchase the renowned observability platform New Relic (NYSE: NEWR) for $87 per share in an all-cash transaction. This purchase values New Relic at an approximate equity valuation of $6.5 billion.

Positioned as a frontrunner in the field of observability, New Relic arms engineers with a fact-based methodology to design, construct, deploy, and maintain superior software. New Relic provides an exclusive unified data platform that enables engineers to collect comprehensive telemetry data—including metrics, events, logs, and traces—further augmented with powerful full-stack analysis tools. This fusion assists engineers to make data-driven decisions, steering away from mere conjectures.

Offered via the industry’s pioneer usage-based consumption pricing model, which is both intuitive and predictable, New Relic delivers enhanced value to engineers. It aids in optimizing planning cycle durations, reducing change failure rates, increasing release frequency, and decreasing mean time to resolution.

The web tracking and analytics company helps globally renowned brands, such as adidas Runtastic, American Red Cross, Australia Post, Banco Inter, Chegg, GoTo Group, Ryanair, Sainsbury’s, Signify Health, TopGolf, and World Fuel Services (WFS), to bolster uptime, reliability, and operational efficiency. Consequently, it facilitates delivering unparalleled customer experiences that spur innovation and growth.

The purchase price for New Relic signifies a 26% premium on its 30-day volume-weighted average closing price as of July 28, 2023. It also translates to approximately a 30% premium on the company’s last-twelve-months volume-weighted average closing price. With the successful completion of this transaction, New Relic will transition into a private entity, allowing for greater flexibility in investing in its leading observability platform to meet customer needs more efficiently.

Lead Independent Director of the New Relic Board, Hope Cochran, commented, “We are pleased to have reached this agreement with Francisco Partners and TPG, which delivers significant, immediate value to shareholders. This transaction is the result of a comprehensive process that included engagement with both financial and strategic parties…”

Lew Cirne, Founder and Executive Chairman of the New Relic Board, added, “Ever since our founding over 15 years ago, New Relic has created and delivered groundbreaking innovations… We are pleased to partner with Francisco Partners and TPG…”

New Relic CEO, Bill Staples, expressed his enthusiasm about the deal, saying, “New Relic has made significant progress on its consumption business transition and, together with Francisco Partners and TPG, we will have the resources and flexibility…”

The acquisition was unanimously approved by the New Relic Board of Directors, with the transaction set to conclude in late 2023 or early 2024. This depends on meeting specific regulatory requirements, including shareholder approval and expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. After the transaction’s completion, New Relic common stock will no longer be listed on any public market.