Why New Relic Stock Is Shooting Higher Today

New Relic, Inc. NEWR shares are trading higher after the company agreed to be taken private by Francisco Partners and TPG for $87.00 per share in cash. The company also reported better-than-expected Q1 FY24 financial results.

The purchase price represents a premium of approximately 17% to New Relic's July 28, 2023, closing price.

The company reported revenues of $242.63 million, beating the analyst consensus of $239.13 million. Adjusted EPS of $0.43 beats the Street view of $0.31. 

The company held cash and equivalents at quarter-end of $457 million.

NEWR has entered into a definitive agreement to be acquired by Francisco Partners and TPG in an all-cash transaction with an equity valuation of approximately $6.5 billion. 

The purchase price represents a premium of approximately 26% to New Relic's 30-day volume-weighted average closing price ending on July 28, 2023.

Upon completion of the transaction, New Relic will become a private company and no longer be listed on any public market. The transaction is expected to close in late 2023 or early 2024.

Under the terms of the agreement, New Relic may solicit alternative acquisition proposals from third parties during a 45-day "go-shop" period following the date of execution of the merger agreement. 

Price Action: NEWR shares are trading higher by 13.33% to $83.92 on the last check Monday.