BMC Said to Get Separate Bids From KKR and Bain Buyout Groups

BMC Software Inc., the software maker that abandoned a sale last year, received separate bids from two groups of buyout firms ahead of the final deadline April 22, said people with knowledge of the situation.

KKR & Co., TPG Capital and Thoma Bravo LLC made an offer, said the people, who asked not to be named because the process is private. A group including Bain Capital LLC and Golden Gate Capital also bid for the Houston-based maker of software that manages corporate computer networks, they said. At least one of the two bidding groups offered around $48 a share, said a person familiar with the bidding.

BMC’s board will meet tomorrow to review the bids and may make a decision on the sale by May 7, when its earnings are due, one of the people said. The board may conclude not to sell after reviewing the bids because the offers aren’t much higher than where the shares are trading, two other people said. The stock, which has climbed more than 11 percent this year, rose less than 1 percent to $44.13 yesterday, giving the company a market capitalization of about $6.3 billion.

A representative for BMC declined to comment. Representatives for New York-based KKR and Boston-based Bain declined to comment, as did representatives for Chicago-based Thoma Bravo, San Francisco-based Golden Gate and Fort Worth, Texas-based TPG.

Cash, Debt

Each group of bidders is likely to invest about $2 billion in equity and is planning to raise about $5 billion in debt to help fund the buyout, people familiar with the situation said. Part of the new debt would go to pay down $1.3 billion in existing debt, they said, while the company would provide the rest of the funding in cash.

BMC had $1.18 billion in cash and short-term assets on its balance sheet at the end of last year, regulatory filings show, and as much as $1 billion could be tapped to help finance the deal, according to the people with knowledge of the matter.

BMC held talks last year with buyout firms amid pressure from activist investor Elliott Associates LP before deciding to buy back $1 billion in shares instead. BMC attracted renewed interest in March stemming from the upcoming expiration of Elliott’s standstill agreement, a person familiar with the situation said then. BMC didn’t formally restart a sale process and the talks may again fail to result in a deal, another person said at the time.

Elliott is the second-largest shareholder in BMC, according to data compiled by Bloomberg, with a 9.6 percent stake as of April 8.

BMC sells software that manages fleets of computer servers and mainframes, configuring new machines and applying updates to older ones. The company does business in two areas -- a unit that makes software for managing server networks and the other for mainframe products.

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