BMC Software Announces New $1 Billion Share Repurchase Authorization
BMC Software Announces New $1 Billion Share Repurchase Authorization
- BMC expects $750 million of new repurchase authorization to be executed via an accelerated share repurchase agreement to be entered into by December 31, 2012
- At current prices, new share repurchase would represent roughly 15 percent of the Company’s current shares outstanding
BMC Software’s (NASDAQ: BMC) board of directors has approved a new $1 billion share repurchase. At today’s prices, this repurchase would equal approximately 15 percent of the Company’s current shares outstanding.
BMC anticipates completing this new $1 billion share repurchase within the next 12 months. Of that amount, the Company expects $750 million to be executed via an accelerated share repurchase agreement to be entered into within its fiscal third quarter ending December 31, 2012. BMC expects to fund this program with cash on hand as well as other sources of available liquidity.
The decision to authorize this new program comes after a thorough strategic review by the Company’s board of directors.
“On a regular basis, BMC and its board review a broad array of strategic paths toward maximizing shareholder value – we feel it is responsible policy for a public company,” said Bob Beauchamp, BMC’s chairman and chief executive officer. “After a series of discussions with major shareholders earlier this year, we took an even more rigorous approach to our regular review, including designating four board members as a working group to oversee it.”
With assistance of outside advisors, the Company regularly considers a range of alternatives -- splits, spins, transformational acquisitions, sale, and capital structure -- along with internal investment strategies and independent public company paths to success. This year, a working group made up of four members of the Company’s board led and oversaw the review. The working group included two of BMC’s newest directors -- Jim Schaper and John Dillon -- as well as Lou Lavigne and Mark Hawkins. After evaluating the results of this extensive review, BMC’s board of directors unanimously agreed that the repurchase program is the best outcome for BMC’s shareholders.
“As chairman of the working group that oversaw this review, I was impressed and very pleased with the diligence and focus of management, the board and our external advisors. I am very confident in the process and the results,” Schaper said.
"Mr. Schaper chaired a very well-run strategic review, and I fully support the methodology and the outcome," said Lavigne, who also serves as chairman of BMC’s audit committee.
Dillon said: "I was impressed with the rigor and focus of this process, including the internal review as well as exploration of strategic paths. I feel strongly that the result of this review and the actions taken by the Board are the best paths to shareholder value.”
Beauchamp added, “Management and our board are united in our confidence in our continued prospects and our commitment to delivering superior results and value to our shareholders. We believe that new releases of our industry-leading solutions, together with the launch of BMC MyIT and positive progress on our go-to-market plans, will further strengthen BMC’s execution. Furthermore, we are taking additional steps to deliver on that commitment, which include both a significant return of capital to our shareholders as well as refocusing our internal investments with an increased emphasis on our high-growth initiatives including our cloud, automation and SaaS-based solutions.”
Steve Solcher, BMC’s chief financial officer, added, “Since fiscal 2001, BMC has repurchased approximately $4.5 billion of its shares. BMC's share repurchase program remains one of the many ways we deliver value to our shareholders. BMC Software's strong capital structure and free cash flow generation continue to allow us to enhance shareholder value by returning significant funds to shareholders.”
Along with the Company’s currently outstanding authorization, this new authorization brings the total outstanding share repurchase authorizations to roughly $1.5 billion.
Any repurchases under the Company’s open-market share repurchase program may be made from time to time, subject to market conditions and other factors, in the open market or through solicited or unsolicited privately negotiated transactions or in such other manner that complies with the Securities Exchange Act of 1934. The program does not obligate the Company to acquire any particular amount of common stock, and it may be modified or suspended at any time at the Company’s discretion.
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Tens of thousands of IT organizations around the world -- from small and mid-market businesses to the Global 100 -- rely on BMC Software (NASDAQ: BMC) to manage their business services and applications across distributed, mainframe, virtual and cloud environments. BMC helps customers cut costs, reduce risk and achieve business objectives with the broadest choice of IT management solutions, including industry-leading Business Service Management and Cloud Management offerings. For the four fiscal quarters ended September 30, 2012, BMC revenue was approximately $2.2 billion. www.bmc.com
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