JFrog shares gain on report of takeover interest

Investing.com -- Software development tools company JFrog has attracted interest from private equity firms, Bloomberg reported on Friday, citing sources familiar with the matter.

JFrog shares rose more than 5% on Thursday and are up over 4% in premarket trading on Friday.

Several private equity firms, including Permira and Hellman&Friedman, have reportedly shown early interest in a potential acquisition of JFrog, sources told Bloomberg.

However, discussions are said to remain preliminary and may not lead to a formal transaction, the sources added, noting that the information remains confidential.

In response to the takeover speculation, a spokesperson for JFrog told Bloomberg that "the company is not in discussions with any private equity or financial adviser regarding M&A at this time," and reiterated that JFrog does not typically comment on rumors.

Meanwhile, the report states that representatives from Permira and Hellman&Friedman declined to comment on the situation.

JFrog's shares, which have dropped 14% this year, rose on news of the possible takeover interest. The company currently holds a market capitalization of $3.28 billion, Bloomberg noted.

Founded in 2008, JFrog operates in the DevOps space, providing tools that enable enterprises to more efficiently manage the development and deployment of software.

Earlier this year, JFrog revised its financial guidance for fiscal 2024, lowering revenue expectations to between $422 million and $424 million, citing challenges in the macroeconomic environment that could delay deal closures.

The guidance downgrade led to a 28% drop in JFrog's stock following its second-quarter earnings report.

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