The buyers are Bain Capital, Golden Gate Capital, GIC Special Investments and Insight Venture Partners. The price represented $46.25 a share, or a premium of 2% over the $45.42 price at which BMC closed Friday. At the latter value, BMC has a market cap of $6.49 billion.
In some ways, the move parallels Michael Dell's effort to take his company out of the publicly traded arena and into private operations. Dell is also moving into systems management, with an emphasis on selling virtualized systems and managing the virtual data center and private cloud/public cloud operations.
BMC has competed with CA Technologies, HP and IBM to provide third-party systems management for major hardware and software vendors. But the nature of systems management began to change drastically as virtualization took over the data center. Now Microsoft through its System Center Virtualization Manager and VMware through its vCenter Operations are moving more decisively into the systems management space.
[Want to learn more about the BMC and VMware rivalry? See VMware's System Management Push: CA, BMC, HP Push Back.]
BMC held a market-leading position with its change management database, Atrium, and related products, giving its customers a point of control and configuration consistency for data center operations. Nevertheless, BMC was considered vulnerable enough that a number of suitors first emerged a year ago, lead by Elliott Management, with Dell, IBM, Oracle, EMC and Cisco reportedly in the bidding as well. Elliott Management ended up with 6.9% of BMC last year, placed two members on the board of directors and pushed for the sale of the company.
Chairman of the BMC board, president and CEO Bob Beauchamp said in an interview that the offer led by Bain Capital and Golden Gate was welcome as a favorable outcome to shareholders and a way to put an end to a period of uncertainty. "I'm glad to get the rumors and speculation behind us," he said in an interview.
BMC will continue operating as before, with no big changes planned for its 6,500 employees or management, he said. But the acquisition will provide BMC with the capital to pursue larger profits in its most successful product lines. In particular, BMC thinks it has a hit with its MyIT for managing mobile devices. In the last quarter, it signed large MyIT deals with Exxon Mobile and Credit Suisse for "tens of thousands of end users," as MyIT became generally available. MyIT first launched at the end of October.
"You can expect to see us continue to invest heavily in self-service IT" on the MyIT pattern, Beauchamp said.
Elliott Management urged BMC to become more of a cloud systems management company. Beauchamp said BMC has already moved into that field. "Nine out of the 10 leading software-as-a-service companies, including Salesforce.com and Workday, use our product that manages the SaaS end user experience," he said. With the private investor buyout, "we'll have more resources available to accelerate our top-line growth," he said.
BMC was founded in 1980 as a mainframe and general data center systems management vendor. It went public in 1988. Revenues in fiscal 2012 were $2.2 billion, with net earnings of $562 million. It has what is regarded as a small amount of debt at $151 million.
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