Bloomberg News

BMC Software Said to Get Fresh Buyout Interest From KKR, TPG

March 05, 2013

BMC Software Inc. (BMC:US), the maker of programs to manage corporate computer networks that abandoned a sale last year, has attracted renewed buyout interest from private-equity funds, people with knowledge of the matter said.

KKR & Co. and TPG Capital have separately expressed interest in Houston-based BMC, said the people, who declined to be identified because the talks are private. BMC held similar talks last year amid pressure from activist investor Elliott Associates LP before deciding to buy back $1 billion in shares instead. BMC rose 3.7 percent to $42.32 at the close in New York, for a market value of about $6 billion.

BMC didn’t formally restart a sale process and the talks may fail again, said one of the people. The renewed interest from the buyout firms stems from the upcoming expiration of Elliott’s standstill agreement on March 23, after which it can continue to push its agenda, said one of the people. The expiration is a month before the deadline to propose new members to BMC’s board.

Representatives for BMC, KKR, TPG and Elliott declined to comment.

BMC sells software that lets information technology departments better manage fleets of computer servers and mainframes, configuring new machines 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.

In July, BMC added two directors chosen by Elliott to its board after earlier rebuffing Elliott’s push to seek five seats and pursue a sale. Elliott is BMC’s second-largest shareholder, with a 9.6 percent stake as of Jan. 30, according to data (BMC:US) compiled by Bloomberg.

To contact the reporters on this story: Serena Saitto in New York at ssaitto@bloomberg.net; Jodi Xu in New York at jxu205@bloomberg.net

To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net; Jeffrey McCracken at jmccracken3@bloomberg.net


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