BMC Software and CA Inc are reportedly considering a potential merger which, if the deal goes ahead, could be the biggest tech buyout since Dell.
According to reports from Bloomberg, the deal would see the software companies combine as part of a move to take CA private. According to people familiar with the matter, the companies have already approached banks about putting together a debt package to finance a BMC buyout of CA. Talks are, however, still at an early stage with no certainty that a deal will be reached.
Rumours of a buyout saw shares in CA rise as much as 17% in late trading on Tuesday, valuing the company at around $13.2bn. BMC has been owned by Bain Capital and Golden Gate Capital since 2013, following a buyout which took the company private. That deal was valued at around $6.9bn, according to Bloomberg.
If the deal were to go ahead, it has the legs to potentially eclipse the Dell leveraged buyout. The deal, which was valued at at almost $25bn in 2013, saw a group led by Michael Dell and Silver Lake Management buy Dell Inc.
CA is a software company which specialises in developing cloud and mobile applications. It was founded in 1976 and went public in 1981. Eight years later it was the first software company to reach the $1bn in revenue mark and has since grown through acquisitions. CA bought Veracode for $614m, as well as Automic, Rally Software Development and Xceedium.
BMC Software was founded in 1980 by former Shell Oil employees whose surname initials make up the ‘BMC’ in the company name. The company began as a mainframe software vendor but has since developed software to monitor, manage and automate distributed and mainframe systems. The company’s offering is broad, from IT service management and data centre automation, to virtualization lifecycle management and cloud computing management.