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Breakingviews: Bain's BMC buyout

Monday, May 06, 2013 - 02:58

May 6 - BMC Software is finally being sold for $6.9 bln. Richard Beales and Robert Cyran discuss why the deal makes sense for buyers and sellers alike despite a thin-seeming premium.

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Another Monday another merger at this time six point nine billion dollars being paid for BMC software by some private equity firms led by. Playing capitol. The -- thing about this one is that at least compared to last week the premium is almost -- existent a couple of the settlement on the Sampras rope. Is that really what is. Well it depends when you start looking at if you look at you know from the effort Friday there's this your premium -- -- at when the company said okay we're we're. In negotiations with private equity -- of small premium quote backwards in time you can't really associate an activist when they've made a presentation that this company should be sold 10% creamy if you can -- first got involved right at 30% premium so it's like. Rescue at least you're not a Harvard that I want to play the right number it's an -- program that was blended these. January -- Nearly eighteen months -- and the other thing if you were even further and talked about BMC dean takeover candidate for years it's been shopped around and -- talked about how it's obvious someone's gonna buy this company at some point -- -- what went to date that it's finally come to -- it's a few similarities in C makes. Networking so -- that some sort of similarities with though that this is not a Phillies heartland than that neither of sort of growing well both -- -- particular private equity exactly and and with credit you want good cash flows and can you let her up and get a little money on this exhibit -- that -- yeah and B and -- they have mainframe business you know it's very boring kind of business people companies are gonna rip these things out on a whim and they're gonna keep them they're gonna keep on the contracts rolling over. And the problem with Dell I mean the reason why -- takeovers looking bit shaky is that. Computers you but you have to -- new computer for a couple years you know and people are increasingly I think if they'd rather own a tablet rather than an -- PC so Euro to Libya Italy Dell's deal originally -- she. Yet the problems in the PC market dynamic in the media thinks that maybe there's a reason why analysts TSE's may be admitted do exactly Indian city. You know that's going to be around and in several years in May be smaller company that -- us it's going to be around Dell will still be around -- us. -- and Elliott this activists. There's some absolutely well it's old broken so -- different strategic firms that didn't happen but in this case they had a good thing to them yet he got the free option they had you know let's go and shop and around -- a good -- citizens by ruining these two will end and they didn't for various reasons -- IBM -- -- and -- antitrust reasons HP and Dell said okay we're we're we've got her own problems you need to fix. And SAP and oracle are are busy battling each other instead of worrying about tacking on business which which might be nice for them that instead they're worried about a bigger battles. And so they they took that they took the gamble that didn't work out and they've sold to -- -- made a nice return at the end I can't complain that it will leave at that. We'll be watching this BMC deal and we'll have more breaking news for you tomorrow.

Breakingviews: Bain's BMC buyout

Monday, May 06, 2013 - 02:58

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