BMC Software may be taken private in a deal that could exceed $6 billion, with a number of private equity firms reportedly joining forces to bid for the company's shares.
A Reuters story published last week said that BMC, a developer of IT management software, is up for auction. The news has pushed up the company's stock price to around $45.75, which Reuter said would put the value of a complete buyout at around $6.6 billion.
A BMC spokesman declined Monday to comment on "rumor or speculation."
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Last year Houston-based BMC came under pressure to sell itself from activist hedge fund Elliott Management, which owned 9.6 percent of BMC as of Jan. 30, according to the Reuters story. Elliott Management put pressure on the company's board, arguing that BMC management was missing an opportunity to expand into Web-based software, the story said.
Software vendor Novell sold itself to Attachmate in 2010 for approximately $2.2 billion after Elliott Management offered to acquire Novell for about $2 billion.
BMC responded to Elliott Management's moves in October by launching a $1 billion share repurchase program, equaling at the time about 15 percent of the company's outstanding shares.
Private equity firms KKR & Co. and TPG Capital have teamed up to bid on BMC, the Reuters story said, citing "four people familiar with the matter," as have Bain Capital and Golden Gate Capital. Private equity firm Thoma Bravo is participating in a third consortium, according to Reuters.
BMC markets software for managing IT systems, networks, applications and services. The company competes with CA Technologies, Compuware, Hewlett-Packard, IBM, Oracle and other major vendors in the IT management space.
In December Elliott Management made an unsolicited offer to acquire Compuware for $11 per share. Compuware responded by launching a three-year program to reduce costs by $60 million, offering a $.50 per share dividend to shareholders, and spinning off its Covisint cloud platform company.
For its fiscal third quarter ended Dec. 31, BMC reported sales of $580.2 million, up nearly 6 percent from the same period one year earlier, while earnings declined 11.3 percent to $106.3 million.
PUBLISHED MARCH 25, 2013