Forum Home Page [see Broadridge note belo

w]

The Shareholder Forumtm

support for appraised intrinsic value realization

of stock investments in

TIBCO Software Inc.

 
 

AVR Status

TIBCO reported approval of the Merger Agreement by holders of 67% of outstanding shares on December 3, 2014, and the merger became effective on December 5, 2014.

Shareholders who satisfied requirements for an appraisal demand will be able to decide whether to hold or sell the rights, or simply withdraw the demand at any time up to 60 days after the effective date of merger to accept the $24.00 per share offer price.

 
     
 

 

Source: Standard & Poor's Ratings Services, November 5, 2014 report

TIBCO Software Inc. Assigned Preliminary 'B-' Rating On Vista Equity LBO; Outlook Stable; Debt Ratings Assigned

Publication date: 05-Nov-2014 14:08:30 EST

  • Private equity firm Vista Equity Partners is acquiring U.S.-based global
    IT infrastructure and analytics software provider TIBCO Software Inc.,
    and it is proposing to issue new debt instruments to partially fund the
    acquisition.

  • We are a assigning our preliminary 'B-' corporate credit rating to the
    company.

  • We are also assigning our preliminary 'B-' issue-level and preliminary
    '3' recovery ratings to the company's proposed senior secured credit
    facilities and revolving credit facility, and our preliminary 'CCC'
    issue-level and preliminary '6' recovery ratings to its proposed senior
    unsecured notes.

  • The stable outlook reflects our view that cost saving opportunities and
    adequate liquidity could mitigate a potential modest disruption to the
    company's business due to significant cost reduction activities.

SAN FRANCISCO (Standard & Poor's) Nov. 5, 2014--Standard & Poor's Ratings Services said today that it assigned its preliminary 'B-' corporate credit rating to Palo Alto, Calif.-based TIBCO Software Inc. The outlook is stable.

At the same time, we assigned our preliminary 'B-' issue-level rating and preliminary '3' recovery rating to the company's proposed $1.65 billion senior secured first-lien term loan due 2020 and $125 million revolving credit facility due 2019. The preliminary '3' recovery rating indicates our expectation for meaningful recovery (50%-70%; at the lower end of the range) in the event of payment default.

We also assigned our preliminary 'CCC' issue-level rating and preliminary '6' recovery rating the company's proposed $950 million senior unsecured notes due 2021. The preliminary '6' recovery rating indicates our expectation for negligible recovery (0%-10%) in the event of payment default.

Balboa Merger Sub Inc. will be the initial borrower of the debt. Once the acquisition is completed, Balboa will merge into TIBCO, and TIBCO will be the borrower going forward. We will finalize our preliminary ratings following a review of the executed closing documents.

The rating on TIBCO reflects our adjusted leverage of almost 11x (pro forma for the proposed transaction, excluding the asset sale bridge facility and cost saving adjustments), the transition risk associated with TIBCO's aggressive cost reduction plan, and the company's recent slowing revenue growth. Partially offsetting these factors are significant cost saving opportunities that could result in adjusted leverage near 8x over the next 12 months--if the company manages transition risk effectively--and its established positions in the IT integration and analytics software markets.

"The stable outlook reflects our view that TIBCO's cost saving opportunities and adequate liquidity are likely to mitigate unplanned business disruption from its cost restructuring activities, such that the company is likely to meet its debt service obligations over the next 12 months," said Standard & Poor's credit analyst Christian Frank.

We could lower the rating if the expected headquarters sale-leaseback transaction is not on track to be completed before the asset sale bridge loan's maturity; if disruption from transition activities causes licenses and professional services sales to decline more than we expect, resulting in negative FOCF on a sustained basis; or if financial covenants restrict access to revolver borrowings such that we view the company's liquidity as less than adequate.

We could raise the rating if the company generates consistent license sales and implements material cost reductions such that it records sustained leverage below 8x.

RELATED CRITERIA AND RESEARCH

Related Criteria 

Complete ratings information is available to subscribers of RatingsDirect at www.globalcreditportal.com and at www.spcapitaliq.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.

Primary Credit Analyst:

Christian Frank, San Francisco (1) 415-371-5069;
christian.frank@standardandpoors.com
Secondary Contact: Philip L Schrank, New York (1) 212-438-7859;
phil.schrank@standardandpoors.com

 

No content (including ratings, credit-related analyses and data, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of S&P. The Content shall not be used for any unlawful or unauthorized purposes. S&P, its affiliates, and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions, regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an “as is” basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the Content even if advised of the possibility of such damages.

Credit-related analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P’s opinions and analyses do not address the suitability of any security. S&P does not act as a fiduciary or an investment advisor. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives.

S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.

S&P may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.standardandpoors.com (free of charge), and www.ratingsdirect.com and www.globalcreditportal.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.standardandpoors.com/usratingsfees.

Any Passwords/user IDs issued by S&P to users are single user-dedicated and may ONLY be used by the individual to whom they have been assigned. No sharing of passwords/user IDs and no simultaneous access via the same password/user ID is permitted. To reprint, translate, or use the data or information other than as provided herein, contact Client Services, 55 Water Street, New York, NY 10041; (1) 212-438-7280 or by e-mail to: research_request@standardandpoors.com.

 

Copyright © 2014 Standard & Poor’s Financial Services LLC, a part of McGraw Hill Financial.

 

 

The project supporting investor interests in TIBCO Software Inc. is being conducted by the Shareholder Forum for the benefit of Participants that have reserved Appraised Value Rights ("AVR") Managment, subject to conditions including standard Forum policies that each Participant is expected to make independent use of information obtained through the Forum and that participation is considered private unless the Participant specifically authorizes identification.

Inquiries may be sent to tibx@shareholderforum.com.

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.