KKR Buys Bain's BMC in Deal Said to Be Worth $8.3 Billion

(Bloomberg) -- KKR & Co. agreed to acquire BMC Software Inc. in a deal that valued the information technology management provider at about $8.3 billion including debt, according to a person familiar with the matter.

KKR will buy BMC from an investor group led by Bain Capital and Golden Gate Capital together with GIC Pte Ltd., Insight Venture Partners and Elliott Management Corp, according to a statement Tuesday. The transaction comes about five years after the infrastructure software provider was taken private in a $6.9 billion deal.

Houston-based BMC builds various types of software solutions for businesses looking to manage and streamline their information. Since going private in September 2013, the company has invested hundreds of millions of dollars in research, development and product delivery initiatives, according to the statement. BMC has more than $5 billion in debt outstanding, according to data compiled by Bloomberg.

KKR intends to be more aggressive when it comes to M&A and is open to small as well as large transactions, according to a person familiar with the firm’s strategy who asked not to be identified because the matter was private.

KKR declined to comment on both the size of the transaction or the firm’s plans beyond what’s stated in Tuesday’s release. Representatives for Bain and Golden Gate also declined to comment.

Tech Interest

BMC’s owners held talks in 2017 with CA Inc. about taking that $15 billion company private and combining the businesses, people familiar with the matter have said. BMC had also attracted interest from private equity firm Thoma Bravo this year, other people with knowledge of the sale process had said.

Before Tuesday, buyout firms had announced three $1 billion-plus technology acquisitions this year, including takeovers of Mitel Networks Corp., VeriFone Systems Inc. and CommerceHub Inc., according to data compiled by Bloomberg. There were just four such deals in all of 2017 and 2016.

BMC has about 6,000 employees in 30 countries, according to its website. The company helps customers including Vodafone Group Plc and Lockheed Martin Corp. manage their information technology systems.

Goldman Sachs Group Inc., Credit Suisse Group AG and Morgan Stanley advised BMC on the deal, while Macquarie Capital advised KKR. BMC’s legal adviser was Kirkland & Ellis LLP, while KKR’s law firm was Simpson Thacher & Bartlett LLP.

--With assistance from Alex Barinka and Kiel Porter.

To contact the reporter on this story: Melissa Mittelman in New York at mmittelman@bloomberg.net

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Michael Hytha, Molly Schuetz

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