Tibco Software Inc. (TIBX): $4.3 billion Deal with Vista Equity Might Flush Other Bidders Out

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Tibco Software Inc. (NASDAQ:TIBX) was trying to find the potential buyer for its business for quite some time now. Recent announcements suggested that the software maker has agreed to a potential deal with Vista Equity Partners for $4.3 billion. CNBC contributor, Herb Greenberg talked on CNBC about the valuation of Tibco software.

TIBCO-Software

Tibco Software Inc. (NASDAQ:TIBX)’s current valuation of $4.3 billion was calculated based on a share price of $24 per share, which is 23% more than the Tibco’s closing price on Friday, $19.51. The valuation also includes the company’s debt of $19.8 million.

It was rumored back in 2011 that Tibco Software Inc. (NASDAQ:TIBX) might be acquired by Hewlett-Packard Company (NYSE:HPQ) for a price somewhere between $30 and $40 per share. But the talks did not materilize due to non-agreement of terms by both the companies.

Greenberg pointed to that incident from 2011 and said that the current valuation of Tibco Software Inc. (NASDAQ:TIBX) is much lesser that the one drafted out during 2011.

“[…] the way it has been valued. It has been valued based on the recurring revenue of the company, when the recurring revenue of the company is only part of the company. It doesn’t even take into account the future growth of its real growth engine, which is an analytic software known as SmartFire,” Greenberg said about Tibco Software Inc. (NASDAQ:TIBX)’s valuation.

Greenberg added that this might just be the first wave of announcement around the acquisition of Tibco Software Inc. (NASDAQ:TIBX). He thinks that Vista Equity Services might flush out the other potential interested candidates to acquire Tibco.

Many analysts’ said that there will be no bid at all for Tibco Software Inc. (NASDAQ:TIBX) in the coming days. But Greenberg pointed that it has changed now. Analysts’ started saying that there will be no more bids for Tibco. Greenberg thinks that this might also change with more potential bidders for Tibco Software Inc. (NASDAQ:TIBX) in the days to come.

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