Private equity firms TPG and Francisco Partners are set to acquire software observability leader New Relic in a deal valued at $6.5 billion. The deal is one of the largest take-privates of 2023 and comes amid a broader slowdown in PE deal flow.

New Relic provides software that helps businesses monitor and troubleshoot their technology stacks. The company went public in 2014 at $23 per share and has since grown to become a leading provider of observability solutions.

The two buyout shops agreed to acquire the San Francisco-based company for $87 per share in cash, a roughly 26% premium to New Relic’s 30-day volume-weighted average closing price ended Friday. The deal is valued at $6.5 billion, including debt.

The deal is expected to close late this year or early next year. TPG and Francisco Partners said that they plan to invest in New Relic’s growth and innovation, as well as expand its product offerings.

The acquisition of New Relic is a sign of the continued strength of the software sector. The sector has been a hotbed of M&A activity in recent years, as investors seek to acquire high-growth businesses.