BMC Software has agreed to sell itself and go private, for $6.9 billion. A private investor group led by Bain Capital and Golden Gate Capital, together with GIC Special Investments and Insight Venture Partners, is paying $46.25 per share in an all-cash deal. The transaction is expected to close later this year.
Bob Beauchamp, chairman and CEO at BMC, said the company came to the decision to sell itself after a "thorough review of strategic alternatives." He noted that $6.9 billion figure was a premium to the company's stock price. Under the terms of the agreement, BMC can solicit alternative proposals from third parties for the next 30 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," Beauchamp said.
Bullish on BMC
Tens of thousands of IT organizations around the world -- from small- and mid-market businesses to the Global 100 -- rely on BMC to manage their business services and applications across distributed, mainframe, virtual and cloud environments.
Ian Loring, managing director at Bain Capital, explained his attraction to BMC. He said it 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."
And Prescott Ashe, managing director of Golden Gate Capital, called BMC an "innovative leader in IT operations management and has strong leadership positions in growing segments such as cloud management, service management and workload automation ."
Retooling for the Future
Investors are clearly bullish on the prospects of owning BMC, but what do analysts say? We asked Zeus Kerravala, principal analyst at ZK Research, for his take on the deal. He told us network and systems management is undergoing a major change and BMC needs to retool for the future.
"When you think of IT in general, things have become more mobile and more virtual and cloud-based. I think almost every management tool out there, including BMC's, was built more for a world where IT infrastructure was static and physical," Kerravala said.
"As far as the legacy vendors go -- and I would put OpenView and CA and BMC in that category -- BMC was probably the closest to being a good virtual IT management tool. But I still think there's a lot of development that needs to be done in order to get that product in line with the future of IT."
But retooling as a publicly traded company is difficult, he said. By going private, BMC has the opportunity to keep what's working, sell off or minimize what is not working, then build that product to meet the needs for the current state of IT.