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"I enjoy not being a public company."

-Marc Andreessen

BMC Software in Talks to Buy CA Technologies

Financial Information*
  • Financial Terms Not Disclosed
Transaction Facts
  • According to Bloomberg, BMC Software Inc. is in talks to acquire enterprise software company CA Technologies (NASDAQ:CA) in a leveraged buyout that would take CA private. Both parties have allegedly approached banks about putting together a debt package to finance the deal, which is said to be at an early stage. Both parties have declined to comment on the deal.
  • CA shares rose roughly 17% on Tuesday and 13% today following the report.
A Combination That Could Shift the Channel
  • Big Deal: This potential deal could be the biggest LBO of a tech company since Silver Lake acquired Dell for $24.4B, and private equity firms are playing an outsized role. Bain Capital and Golden Gate Capital, which have jointly owned BMC since 2013 in a $6.9B private buyout, may contribute new equity to help finance the deal.
  • PE Time: Private equity interest in sustainable software ventures is an ongoing pattern. A year after the BMC buyout, Thoma Bravo acquired legacy mainframe software vendor Compuware Corp for $2.5B, and in 2016, Silver Lake and Thoma Bravo acquired SolarWinds. In recent news, Thoma Bravo acquired Continuum last week for its MSP-oriented software and services in the SMB sector. Meanwhile, cloud-services company Citrix has been generating interest from firms like Bain, Carlyle Group LP and Thoma Bravo as it works with Goldman Sachs on its possible sale.
  • Greater Consolidation: Founded in 1976, CA gained prominence as a mainframe software provider in the 80s, growing into a company with a market cap of around $15B. CA has modernized many of its product offerings over the last few years and has caught onto cloud, announcing in March that it was acquiring application security firm Veracode for $614M. Even so, the company has struggled to show organic growth amidst an increasingly fragmented software market, and the potential combination — alongside the implications of going private — could give the company the boost in needs. As both BMC and CA promote mature application performance monitoring (APM) software, the deal could promote greater consolidation across the IT management, monitoring and security software markets.
For more information about this potential transaction, click here to read the Bloomberg report.
*Financial Information from S&P Capital IQ. 
martinwolf was not the advisor in this transaction.
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