UPDATE 3-SumTotal to be bought by Vista Equity for $160 mln

* Agrees to be bought by Vista Equity for $160 mln

* Says Vista Equity to pay $4.85/share in cash

* Says paid Accel-KKR termination fee of $6.67 mln

* Discovery Group says will back Vista deal

* SumTotal shares down as much as 3 percent

(Adds analyst comments, shareholder comments, updates share movement)

By Deepti Govind

BANGALORE, May 27 (Reuters) - Software-maker SumTotal Systems Inc SUMT.O agreed to be bought by its largest shareholder, Vista Equity Partners, for $160 million and terminated its previous deal with Accel-KKR, ending a long-drawn bidding war between the two private equity firms.

The revised offer price of $4.85 is at a slight discount to Tuesday's closing price of SumTotal shares, but represents a premium of 141 percent over its closing price on April 3, the last trading day before Vista's initial proposal for the company.

Vista, which owns about 13 percent of SumTotal, has been bidding against technology-focused private equity firm Accel-KKR for the company, which makes learning performance and compensation management software.

Vista first offered to buy SumTotal in April for $3.25 per share, but was forced to raise its offer thrice in the past month.

SumTotal, which had earlier agreed to be taken over by Accel-KKR for $4.80 a share, said it paid a breakup fee of $6.67 million to the private equity firm. [ID:nBNG490421]

"This brings to a conclusion the auction process that has been conducted over the past month," said Craig-Hallum Capital Group analyst Eric Martinuzzi over the phone.

"It's not to say that someone couldn't come in with a higher bid, but it is to say that the odds of that are virtually nil," added Martinuzzi.

Discovery Group, the second largest SumTotal shareholder that owns about 10 percent of the stock, said it would support the deal with Vista Equity.

Dan Donoghue, managing partner of Discovery Group, said he was happy with the way the deal had progressed from the original offer.

BREAK-UP FEE FALLOUT

Last week, Discovery told Reuters that it did not want a breakup fee to be included in any merger proposal and instead wanted the money to go to shareholders. [ID:nBNG365669]

"The Vista deal is probably 10 to 20 cents light in value because Vista's got to pay the KKR breakup fee," Donoghue said on Wednesday.

Analyst Martinuzzi said, "Vista's still not happy with the fact that the entity they are acquiring had to pay this breakup fee."

"They definitely wanted the asset, so they were willing to pay the breakup fee, but grudgingly," added Martinuzzi.

Wednesday's deal is yet to be approved by SumTotal's shareholders, the company said in a statement.

SumTotal shares, which were trading at $2.01 in April before the bidding war began, fell 15 cents to $4.74 in afternoon trade on Nasdaq.

For the related alerts, double-click here. [ID:nWNAB3612] [ID:nWNAB3804] (Reporting by Deepti Govind in Bangalore; Editing by Anil D'Silva and Aradhana Aravindan)