Systems-management software vendor Peregrine Systems last week filed for bankruptcy protection and agreed to sell its Remedy help-desk software business to BMC Software for $350 million in cash. Peregrine says Remedy's sale will help it reduce debt and continue operations.
BMC would gain about $250 million in revenue from 6,000 licensees of Remedy, which adds customer-support and help-desk functions to BMC's application-monitoring products. BMC says the deal will add to its earnings per share within a year.
Peregrine sought Chapter 11 protection after it was unable to file audited financial statements for the past three years. The company blames its auditors and last week filed a lawsuit against Arthur Andersen and others seeking more than $250 million in damages.
Financial misstatements have wiped out 20% of the company's reported revenue in the past three years, and Peregrine is under investigation by the Securities and Exchange Commission for misstating revenue.