BMC Acquired By Private Investors for $6.9 Billion

Data center management is hot, and investors are picking up on the trend. Software maker BMC is going private in a deal that sees the company acquired by private equity firms Bain Capital and Golden Gate Capital together with GIC Investments and Insight Venture Partners. BMC will be acquired for $46.25 per share in cash, or approximately $6.9 billion. Credit Suisse, RBC Capital Markets and Barclays have agreed to provide debt financing.

There are several reasons why BMC would choose to go private. At the top of the list is the flexibility it provides from a strategic standpoint. Answering to investors is difficult, particularly in times of technological paradigm shifts such as these cloud days.

"BMC believes the opportunity to become a private company will provide additional flexibility and position us to invest more strategically to drive powerful innovation and deliver cutting edge customer solutions," said Bob Beauchamp, chairman and chief executive officer at BMC. "We look forward to working closely with all parties to complete this transaction and enter into our next chapter of growth and industry leadership."

The board of directors has approved the deal, which offers only a modest premium above the current stock price. "After a thorough review of strategic alternatives, the BMC board of directors is pleased to reach this agreement, which provides shareholders with immediate and substantial cash value, as well as a premium to our unaffected share price,” said Beauchamp. Shares of BMS have fluctuated between  $44 and $45 in recent weeks, and traded at $45.45 this  afternoon. 

Elliott Management, which owns 9.6 percent of the BMC common stock, has agreed to vote its shares in favor of the transaction.

BMC an attractive play to investors

BMC’s flexibility and its already-strong position in the infrastructure management market made it attractive to the investor group. The company has been expanding its management capabilities, both for internal and external infrastructure.

“BMC is the only enterprise software vendor that can go from mainframe to mobile, with solutions that help IT drive real business innovation and optimize operations management and employee productivity,” said Ian Loring, managing director at Bain Capital. “We and the rest of the Investor Group look forward to working with the management team and employees of BMC to execute additional growth strategies designed to expand the Company’s capabilities and enhance its relationships with customers and partners around the world.”

“BMC is an innovative leader in IT operations management and has strong leadership positions in growing segments such as cloud management, service management and workload automation,” said Prescott Ashe, managing director of Golden Gate Capital. “We are excited to work with the management team and employees to accelerate BMC's growth and strengthen its position as the best-in-class provider of IT management software for heterogeneous environments.”