A group of private equity firms have signed an agreement to acquire BMC Software for $6.9bn, after a year of uncertainty for the middleware development firm. The agreed price works out at $46.25 per share, a premium on BMC's current stock price.
Bob Beauchamp, BMC chief executive, said: "After a thorough review of strategic alternatives, the BMC board of directors is pleased to reach this agreement, which provides shareholders with immediate and substantial cash value, as well as a premium to our unaffected share price.
"BMC believes the opportunity to become a private company will provide additional flexibility and position us to invest more strategically to drive powerful innovation and deliver cutting edge customer solutions."
Spencer Izard, research manager at IDC, said the move was a sensible one for BMC as it tries to find its place in the cloud era.
"Cloud has become a disruptive force within the data centre at a far faster rate than many vendors expected, which is in turn marginalising their position in the market," he said. "From the outside BMC, like many of its established peers, appears to have been challenged with not being able to move quick enough to address the disruptive force that cloud is having across the data centre. Despite the strong brands of BladeLogic, Remedy and Track-IT, perception of a vendor by the stock market and end-user organisations can exert significant pressure."
Izard noted that the buyout would allow BMC to reassess its capabilities and opportunities away from the glare of the stock market.
"Like many of its peers, BMC needs to go through a rapid period of transition if it is to maintain its position within the data centre management market in the face of the rapid consideration and adoption of these new IT trends by end-user organisations," he added.
Since summer last year, BMC's second largest investor, the New York hedge fund Elliott Associates has pressured the firm into selling, and has now come out in support of the agreement.
"Elliott applauds the BMC Software board and executive leadership for delivering this value-maximising outcome for stockholders, which both contains a go-shop provision and reflects what we believe is a substantial premium to BMC's unaffected stock price," said Jesse Cohn, portfolio manager for the hedge fund.
The private investment group acquiring BMC is led by Bain Capital and Golden Gate Capital. The transaction, which is expected to close later this year, is subject to approval from BMC shareholders, regulatory approvals and other customary closing conditions.
BMC will be hoping its move to become a private company goes more smoothly than a similar bid by Michael Dell to take his firm private.