(In headline, corrects spelling of company name Serena instead
of Serera, no changes to text)
By Greg Roumeliotis and Nicola Leske
NEW YORK Nov 25 Private equity firm Silver Lake
is proceeding with an auction for its information technology
management company Serena Software Inc after talks aimed at
selling Serena to its technology peer Attachmate Corp ended,
according to people familiar with the matter.
Silver Lake is now in talks with a small number of
specialist buyout firms, including Veritas Capital Fund
Management LLC and Platinum Equity LLC, about selling its
majority stake in Serena, the people said.
A sale could value Serena Software at between $500 million
and $700 million, much less than the $1.2 billion valuation
Silver Lake placed on it when it took it over in 2006, the
Nevertheless, Silver Lake's latest $10.3 billion private
equity fund was oversubscribed by investors earlier this year,
making it more inclined to accept a loss on Serena Software and
move on, the people said.
The people spoke on condition of anonymity because the sale
process is confidential. Representatives for Serena Software and
Attachmate did not respond to requests for comment while Silver
Lake, Veritas Capital and Platinum equity declined to comment.
San Mateo, California-based Serena provides software to
companies looking to streamline management processes. Some of
its products compete with CA Inc, IBM Corp and
Silver Lake committed $335.5 million in equity in the $1.2
billion deal to take Serena private in 2006. It has not taken
any cash dividends from the company since, according to
Attachmate, owned by Francisco Partners LP, Golden Gate
Capital LLC, Thoma Bravo LLC and Elliott Management Corp, has
been considering acquisitions to boost growth since its $2.2
billion takeover of Novell Inc in 2011.
But Attachmate's private equity owners could not meet Silver
Lake's price expectation on Serena Software, the people said.
The highly competitive management software sector has seen
major private equity dealmaking activity this year, culminating
in the $6.9 billion leveraged buyout of BMC Software Inc earlier
this year by a consortium led by Bain Capital LLC and Golden
Compuware has also put itself on the block after rejecting a
$2.3 billion offer from Elliott, its biggest shareholder. Chief
executive Bob Paul told Reuters this month that he had not
received any takeover offer high enough.
Serena launched two restructuring plans this year to address
falling profits and boost operating margins. The company reduced
its workforce by 8 percent in the first quarter and 24 percent
in the second quarter, for a loss of 175 employees in total. The
company expects to cut operating expenses for its fiscal year
2014 by 17 percent to 19 percent from a year ago.
In the 12 months ending Jan. 31, 2013, Serena reported
adjusted earnings before interest, tax, depreciation and
amortization of $74.4 million, down from $85.8 million over the
same period a year ago. The company had total outstanding debt
of $410 million as of the end of July.
Silver Lake currently owns about two-thirds of Serena, with
the remainder owned primarily by Douglas Troxel, who founded
Serena in 1980 and who was its chief executive officer until
1997. He still sits on Serena's board of directors.
(Additional reporting by Soyoung Kim in New York; Editing by