Vista Said Near $1.5 Billion Deal for Software Firm Blue Prism

(Bloomberg) -- Private equity firm Vista Equity Partners is nearing an agreement to acquire British automation software developer Blue Prism Group Plc for about 1.1 billion pounds ($1.5 billion), people familiar with the matter said.

The U.K. technology company is set to recommend Vista’s bid of 1,125 pence a share as soon as Tuesday, said the people, who asked not to be identified because the discussions are private. The offer would represent a premium of about 35% to Blue Prism’s closing price of 832 pence on Aug. 27, the last full trading day before takeover interest became public. 

Blue Prism said in late August that it was in discussions with Vista and TPG about possible offers for the company. Both firms have until 5 p.m. local time on Tuesday to declare whether they would will make a firm offer under U.K. takeover rules.

After the Vista deal, the buyout firm aims to combine Blue Prism with existing portfolio company Tibco Software Inc., which it acquired in 2014, the people said. Vista plans to maintain Blue Prism’s U.K. headquarters and invest in research and development, they said.

While Blue Prism’s board is endorsing the Vista offer, other suitors could still emerge, the people said. Representatives for Vista and Blue Prism declined to comment. 

Shares of Blue Prism have fallen about 31% in London trading this year, giving the company a market value of about 1.15 billion pounds. One of Blue Prism’s independent directors, Murray Rode, was previously a longtime member of Tibco Software’s management and served as its chief executive officer after its purchase by Vista. 

Activist investor Coast Capital, which owns just under 3% of Blue Prism, recently said it’s open to a private equity takeover of the company after initially opposing a sale. The investment firm’s founder James Rasteh said the company’s management had now earned his trust.

The software company’s depressed valuation reflects concerns about gaps in its product portfolio and its distance from key clients and investors in the U.S., Rasteh said in August. He said his firm had spent five months drawing up potential operational improvements that would accelerate Blue Prism’s sales growth. 

Vista, which focuses on investments in enterprise software companies, was founded by billionaire Robert F. Smith in 2000. It has more than $81 billion in assets under management, according to the firm’s website.

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