TPG, Francisco Partners in talks to buy New Relic -source

By Milana Vinn and Manya Saini

(Reuters) -Private-equity firms Francisco Partners and TPG are jointly planning a bid of more than $5 billion to acquire U.S. business software company New Relic Inc, a person familiar with the matter told Reuters on Wednesday.

Reuters was the first to report in July last year that New Relic was preparing to explore a potential sale following interest from private equity firms.

The company has been targeted by several activist hedge funds including Jana Partners, Engaged Capital, and Eminence Capital in recent years. Last year, Jana won two board seats at New Relic.

New Relic's shares rose on Wednesday after the Wall Street Journal first reported about Francisco Partners and TPG's planned bid for the company. The shares closed 10.8% higher at $83.84 and were flat in extended trading.

San Francisco-based New Relic had a market capitalization of roughly $5.78 billion, as of Wednesday's close.

The company did not immediately respond to a Reuters request for comment, while Francisco Partners and TPG declined to comment.

New Relic develops cloud-based software to help websites and application owners track the performance of their services. Founded in 2008, it was listed in the stock market in 2014.

TPG primarily focuses on sectors such as technology and healthcare, while Francisco Partners is a tech-focused investor.

Leveraged buyout activity has been muted in recent quarters, as private equity firms have struggled to secure cheap debt. Most financial sponsors that have acquired companies since the start of this year have funded the deals mostly with their own funds.

(Reporting by Milana Vinn in New York and Manya Saini in Bengaluru; Editing by Shinjini Ganguli and Grant McCool)

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