AP News

Report: Private equity firms bidding for BMC


NEW YORK (AP) — Shares of business software maker BMC Software Inc. rose Thursday on a report that the company is considering buyout offers from several private equity firms.

THE SPARK: Reuters said Thursday that KKR & Co. and TPG Capital LP have teamed up to buy BMC, as have Bain Capital LLC and Golden Gate Capital. According to the report, which relied on four unidentified people familiar with the matter, final bids are expected in the next few weeks. That the firms are getting together to bid on BMC could make a deal worth more than $6 billion more likely, Reuters said.

BMC, Golden Gate Capital, KKR and TPG would not comment on the report. Bain Capital did not immediately respond to a request for comment.

THE BIG PICTURE: BMC, based in Houston, offers cloud computing and information technology management services to businesses.

Hedge fund Elliott Management, which has a 9.6 percent stake in BMC, last year asked the company to consider selling itself.

The company expects adjusted earnings this fiscal year of $3.35 to $3.45 per share, compared with $3.25 per share in the year that ended in March 2012. When BMC released the guidance in January, Wall Street analysts had expected stronger growth.

The company said then that several large contract renewals didn't close during the fiscal third quarter, and licensing revenue fell while costs increased. BMC said it needed to be more consistent in handling and completing large deals.

SHARE ACTION: BMC Software stock rose $1.47, or 3.3 percent, to $45.46 in afternoon trading. Earlier it peaked at $47.89, its highest price since mid-2011. The shares have gained 14 percent so far this year.


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