Tech buyouts boom: BMC Software to be acquired by KKR

29 May 2018

Image: JohnKwan/Shutterstock

Trend of IT giants being bought by private equity houses continues.

IT services management firm BMC Software is being acquired for an undisclosed sum by private equity firm KKR & Co.

KKR is buying the software firm from an investor group that includes private equity houses Bain Capital and Golden Gate Capital, which took BMC private five years ago in a $6.9bn acquisition deal.

Future Human

While the value of the deal has not been officially disclosed, a report last week by the New York Post valued it at around $10bn.

Texas-headquartered BMC is a 37-year old tech firm that was started by former Shell employees to write software for IBM mainframes.

The company has grown to have more than 10,000 global customers and in recent years moved from being a mainframe player to an IT services management and cloud player.

Buying into BMC Software

“With the support and partnership of our investor group, BMC significantly accelerated its innovation of new technologies and new go-to-market capabilities over the past five years,” said Peter Leav, president and CEO of BMC.

“Our growth outlook remains strong as BMC is competitively advantaged to continue to invest and win in the marketplace.”

The move marks a growing trend by private equity houses to buy IT giants, a trend that contributed to the sequence of events leading up to the Dell-EMC merger.

In the past year, buyout firms have revealed three $1bn-plus acquisitions of tech firms, including the takeovers of Mitel Networks, Verifone Systems and CommerceHub, according to Bloomberg.

“In an ever-changing IT environment that is only becoming more complex, companies that help simplify and manage this essential infrastructure for their enterprise customers play an increasingly important role,” said Herald Chen, KKR member and head of the firm’s Technology, Media and Telecom (TMT) industry team.

“With more than 10,000 customers and 6,000 employees, BMC is a global leader in managing digital and IT infrastructure with a broad portfolio of software solutions. We are thrilled to partner with the talented BMC team to accelerate growth — including via M&A — building on BMC’s deep technology expertise and longstanding customer relationships.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years