Bain, Golden Gate agree to buy BMC Software for $6.9 billion
BMC Software says the buyout investors agrees to pay $46.25 a share in cash
New York: Bain Capital LLC and Golden Gate Capital agreed to acquire BMC Software Inc., the company that abandoned a sale last year, for $6.9 billion in the third- largest private-equity deal of 2013.
The buyout investors, which also include GIC Special Investments Pte Ltd. and Insight Venture Partners, agreed to pay $46.25 a share in cash, BMC said in a statement on Monday. Elliott Associates LP, which owns a 9.6% stake, will vote in favour of the transaction, BMC said.
“The deal makes sense given how much cash flow the company can manage from its mainframe operations," said Kirk Materne, an analyst at Evercore Partners Inc. in New York. Bain is paying about nine times Materne’s projected 2014 cash flow, “which seems reasonable," he said.
Only two private-equity deals announced so far this year are bigger than the proposed BMC transaction—the sales of HJ Heinz Co. and Dell Inc. BMC’s agreement with Bain includes a 30-day period to solicit alternative proposals, according to the statement.
Elliott is the second-largest shareholder in BMC, according to data compiled by Bloomberg.
“We are very happy with the outcome, which is consistent with our historical approach to value creation in the technology sector," said Jesse Cohn, a portfolio manager at Elliott. Bloomberg
Jodi Xu, Lisa Rapaport and Sarah Frier in New York contributed to this story.
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