Tim Mueller’s Transaction Analysis: New IT M&A Deals May 31

KKR Announces BMC Software Acquisition

Financial Information*

  • Transaction Value $8.3B

Transaction Facts

  • KKR & Co. (NYSE:KKR) announced this morning that it agreed to acquire BMC Software, officially acknowledging a transaction that had been speculated about and discussed over the last week.
  • This transaction, reported by Bloomberg to be valued at approximately $8.3 billion including debt, is below the $10 billion figure that had been rumored but represents the firm’s biggest acquisition since the 2008 financial crisis.
  • The transaction is expected to close in the third quarter of 2018.

Closing The Deal

  • Big Deal: Though this deal itself is no record, it illustrates a swing back to bigger leveraged buyouts across the board–fueled by a record $1 trillion in dry powder. KKR is expected to be both more aggressive and more willing to skew bigger in a larger strategic shift.
  • Spooling Up: This is the fourth $1 billion-plus technology acquisition by a buyout firm this year (following acquisitions of Mitel, VeriFone, and CommerceHub). This ties the number of such deals in all of the previous two years.
  • Seeing Runway: KKR is said to be looking to capitalize on potential go-to-market, as Bain and GGC were seen to be focused primarily on product and invested hundreds of millions of dollars in R&D and other improvement initiatives. This opens the company to organic growth–a healthy complement to the standard PE playbook of bolt-on acquisition.

For more information about this transaction, click here to read the press release and click here to read our analysis from last week when the deal was first rumored.

*Financial information from news reports.

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