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Compuware slurped by private equiteer for $2.5bn

Thoma Bravo acquires software house, with EMC stalker's approval

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Private equity firm Thoma Bravo will acquire software house Compuware for about US$2.5bn.

Shareholders will be delivered about $10.92 per share, a 17 per cent premium on last week's closing price for Compuware stock - not bad for a company once known as "the elephants' graveyard".

Compuware chair Gurminder S. Bedi's canned statement says “This is the right transaction for Compuware at the right time, and reflects a thorough Board review of strategic alternatives and the work of a committee established earlier this year to focus on value-generating steps” and goes on to say “Thoma Bravo is an ideal partner for Compuware, adding significant application software, services, and financial expertise."

Significantly, Elliot Management has agreed to the deal. The outfit holds 9.5 per cent of Compuware stock and has spent months agitating for change. Elliot's also taken a stake in EMC of late and let it be known it thinks a VMware spin-out would be the right thing to do for shareholders.

Compuware, as luck would have it, is in the midst of a spin-out of its own: the Covisint “cloud engagement platform” was being kicked out of home before Thoma Bravo closed this deal. The spin-out will continue despite this new transaction.

Thoma Bravo managing partner Orlando Bravo's contribution to the canned statement says “Becoming a private company will enable this established market leader to leverage strategic product and other growth opportunities that will take Compuware to the next level."

Which is a nice way of saying “The Board and management didn't look like achieving the growth our more … erm … rigorous approach can bring, so we can take the company out of the harsh glare of the stock market so we can get mediaeval.”

Compuware's not the only such company to go down the private equity route of late. BMC allowed itself to be acquired in May 2013. Compuware and BMC aren't wholly dissimilar, perhaps suggesting it's tough to keep software companies with their roots in the mainframe era on the straight and narrow these days. ®

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