Bloomberg News

BMC Is Said to Attract Buyout Interest From KKR, TPG, Bain

October 22, 2012

BMC Software Inc. (BMC:US), a maker of software to manage corporate-computer networks, has attracted buyout interest from KKR & Co. and TPG Capital, according to people with knowledge of the situation.

Bain Capital Partners LLC is also studying a possible bid, said three of the people, who asked not to be identified because the talks are private.

Under pressure to consider a sale from activist investor Elliott Associates LP, Houston-based BMC Software held meetings with potential buyers last week, one of the people said. The company has a market value of about $6.4 billion.

BMC also has approached potential strategic buyers such as Oracle Corp. (ORCL:US), Cisco Systems Inc. (CSCO:US), Dell Inc. (DELL:US), EMC Corp. and CA Inc. (CA:US), one person said. Those companies are unlikely to bid because they aren’t interested in BMC’s mainframe business and a break-up would be expensive, the person said. The process isn’t formal and the offers may not materialize, another person said.

BMC sells software that lets information technology departments better manage fleets of computer servers and mainframes, configuring new machines with the software they require and applying updates to older ones. The company is divided into a unit that makes software for managing server networks and another group for mainframe products.

Scott Pace, a spokesman for BMC, didn’t return a call or e- mail seeking comment.

David Frink, a spokesman for Round Rock, Texas-based Dell, declined to comment. Representatives didn’t respond to requests for comment from Redwood City, California-based Oracle; San Jose, California-based Cisco; Hopkinton, Massachusetts-based EMC; and Islandia, New York-based CA, formerly known as Computer Associates.

Directors Added

Kristi Huller of KKR and Owen Blicksilver, an outside spokesman for TPG, both declined to comment. Alex Stanton, an outside spokesman for Bain, also declined to comment.

In July, BMC Software added two directors chosen by Elliott to its board after earlier rebuffing Elliott’s push to seek five seats and pursue a sale. Elliott had a 7.7 percent stake in BMC Software as of August, according to data (BMC:US) compiled by Bloomberg.

BMC Software rose less than 1 percent to $40.70 at 10:26 a.m. in New York. The company has an enterprise value of about $5.7 billion, according to data (BMC:US) compiled by Bloomberg.

To contact the reporters on this story: Serena Saitto in New York at ssaitto@bloomberg.net; Cristina Alesci in New York at calesci2@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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