Image source: SciQuest.

What: Shares of SciQuest (NASDAQ:SQI), a provider of cloud-based spending management solutions, soared on Tuesday following the announcement that the company was being acquired. At 11:45 a.m. ET, the stock was up about 34%.

So what: Affiliates of private equity firm Accel-KKR have agreed to pay $17.75 in cash for each share of SciQuest. That price is a 34% premium over the stock's closing price on May 27. The total equity value of the deal is roughly $509 million, and the transaction is expected to close during the third quarter of 2016.

The deal price is well below SciQuest's all-time high of around $30 per share reached in early 2014.

SQI Chart

SQI data by YCharts.

SciQuest CEO Stephen Wiehe pointed to the benefits of the deal: "This transaction provides SciQuest's stockholders with a significant premium over the pre-announcement market price and we believe it will allow us to increase our focus on long-term success that will benefit customers, employees, partners and suppliers. As a private company, we expect to continue to accelerate innovation, increase efficiency and expand our solution suite."

Now what: SciQuest's revenue growth ground to a halt in 2015, and while the company is profitable on a GAAP basis, those profits are minimal. The deal price will be a disappointment to investors who bought shares between early 2013 and early 2014, but those who bought at the recent lows should be thrilled. Accel-KKR is paying nearly 5 times sales for the company, suggesting that the acquirer is confident that SciQuest can return to growth as a private concern.