Francisco Partners and TPG have agreed to buy software provider New Relic Inc. in a go-private deal that values the company at $6.5 billion.

Francisco Partners and TPG will pay $87 a share in cash for the San Francisco-based company — a premium of about 26% to its 30-day average closing price, according to a company statement issued Monday. New Relic will become a private company upon completion of the deal, which is expected by early 2024.

As part of the takeover terms, New Relic has the right to solicit other bids for 45 days.

Private equity firms have been pouncing on software firms in recent years with tech giants sidelined from large deals amid investor and regulatory scrutiny. In the biggest software take-private deal of 2023, Silver Lake and the Canada Pension Plan Investment Board agreed to take Qualtrics private with a $12.5 billion valuation. New Relic will be the second-largest for the industry this year, according to data compiled by Bloomberg.

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Brian Decker and Evan Daar, partners at Francisco Partners, said in the statement on Monday that New Relic will have the chance to achieve its “full potential” as a private company.