(Updates to add Bain declined to comment, adds detail on offer)
By Greg Roumeliotis
NEW YORK May 5 A private equity group made up
of Bain Capital and Golden Gate Capital Corp are nearing a deal
to acquire BMC Software Inc and an announcement could
come as early as Monday, two people familiar with the matter
The negotiated price is around $46 per share, said one of
the people who wished to remain anonymous because they are not
permitted to speak to the media. That would value the deal at
Discussions are ongoing and the terms could still change,
the sources said on Sunday.
The deal would be one of the largest leveraged buyouts so
far this year, after Michael Dell teamed up with private equity
firm Silver Lake Partners LP to take Dell Inc private
for $24.4 billion. Silver Lake accounts for only a quarter of
the equity in that deal.
Buoyant debt markets have encouraged private equity to
consider larger deals, which in turn call for larger equity
checks and make buyout firms more open to teaming up.
E-mails to BMC were not immediately returned. Bain and
Golden Gate officials declined to comment.
Houston, Texas-based BMC Software shares ended trading at
$45.42 on Friday. It competes with Oracle Corp, SAP AG
, CA Inc and Compuware Corp, and has
been under pressure from Paul Singer's activist hedge fund
Elliott Associates LP to sell itself since last year.
BMC currently trades in line with its peers at around 11.5
times projected earnings, according to Thomson Reuters data. At
an offer price of $46 per share, it would be slightly above the
average at 11.6 times projected earnings.
Elliott, a seasoned investor in the software sector, has a
9.7-percent stake in the company and has argued that BMC's
management was neglecting a huge opportunity to expand into
Internet-based business software, a market dominated by the
likes of Salesforce.com Inc.
The world's largest providers of software for enterprises,
including Oracle, SAP and Microsoft Corp, have already begun
investing heavily in that market. Since Elliott first announced
an activist stake in BMC last May, the software company's shares
have jumped over eight percent from $42 a share.
Elliott is a shareholder in business software company
Attachmate Corp, alongside Golden Gate, Thoma Bravo and
BMC is due to announce first-quarter earnings on May 7. The
company said on April 8 that it would reduce its workforce
following a company-wide operational review. Those job cuts will
result in pretax charges of approximately $33 million to $38
million for severance and related termination costs, it added.
(Additional reporting by Jessica Toonkel; Editing by Marguerita
Choy and Stephen Coates)