Houston-based BMC Software – which is owned by KKR – announced Monday that it agreed to buy Compuware, a mainframe software provider in Detroit backed by Thoma Bravo.
Financial terms weren’t disclosed, but previous reports predicted that Compuware could fetch around $2 billion, including debt.
In 2014, Compuware was taken private by Thoma Bravo for $2.5 billion. After that the private equity firm spun off Compuware’s application performance management unit, which went public last year under the name Dynatrace and has a market capitalization of almost $9 billion.
BMC said Compuware, the company’s third acquisition in less than two years, is one of the largest in its history and is part of an accelerated focus on investing in innovation and disruptive technologies.
A New York-based team at Simpson Thacher & Bartlett counseled BMC, whose in-house team included general counsel Pat Tagtow along with several business and finance personnel. Kirkland & Ellis advised Compuware out of Chicago.
Macquarie Capital and Jefferies provided financial advice to BMC and KKR while Credit Suisse did so for Compuware.
Before being named BMC’s general counsel, Tagtow was the company’s VP of litigation and compliance. The University of Houston-trained lawyer joined the company in 1999 from Haynes and Boone, where he practiced commercial and employment litigation.
Last year Tagtow was a finalist for the M&A Deal of the Year Award by the Houston chapter of the Association for Corporate Counsel for his handling of BMC’s sale to KKR for a reported $8.3 billion with senior counsel Robin Preussel Phillips, who moved to Shell Midstream in January. Bain Capital was BMC’s previous owner.
BMC said in the deal announcement that the combination will build upon the success of BMC Automated Mainframe Intelligence and the Topaz suite, ISPW technology, and classic product portfolios from Compuware to further modernize the mainframe industry.
The buyer added that the merged companies will help customers better manage their mainframe operations, cybersecurity, application development, data and storage as part of their enterprise strategies for “DevOps” – software development/information technology operations. The merged operations will also provide integration of the mainframe platform development and management processes into the enterprise technology stack.
“BMC continues to be focused on evolving and investing in our portfolio to address and even anticipate the needs of our customers, helping them to succeed today and into tomorrow,” BMC CEO and president Ayman Sayed said in the release. “It’s the ideal time to bring Compuware into our portfolio as the traditional mainframe AppDev [application development] market transitions to DevOps.”
KKR partner John Park in Menlo Park said the combination will create a top end-to-end platform focused on driving innovation for its mainframe customers worldwide.