BMC, a KKR portfolio company and IT solutions provider for the digital enterprise, has today announced the signing of a definitive agreement to purchase Compuware, a Thoma Bravo company and a provider of mainframe application development, delivery and support solutions.
The combination of both companies will look to bring the mainframe into the mainstream, as part of a modern IT infrastructure with a full-service solution integrating DevOps.
The transaction builds on BMC’s track record of investing in growth and is expected to be completed in the coming months, subject to customary closing conditions. Financial terms of the transaction were not disclosed.
This will be one of the largest acquisitions in BMC’s history and the Company’s third acquisition in less than two years.
Extracting data from the mainframe to leverage innovation across the enterprise
BMC and Compuware: the strategy
The strategic combination of BMC and Compuware will build upon the success of BMC Automated Mainframe Intelligence (AMI) and the Topaz suite, ISPW technology and classic product portfolios from Compuware to further modernise the mainframe industry.
The combined company will help customers better manage their mainframe operations, cyber security, application development, data and storage as part of their enterprise DevOps strategies, as well as provide seamless integration of the mainframe platform development and management processes into the enterprise technology stack.
“BMC continues to be focused on evolving and investing in our portfolio to address and even anticipate the needs of our customers, helping them to succeed today and into tomorrow,” said Ayman Sayed, president and CEO of BMC.
“It’s the ideal time to bring Compuware into our portfolio as the traditional mainframe AppDev market transitions to DevOps. We’re excited to welcome the Compuware team as we build best-of-breed modern mainframe solutions.”
Also commenting on the acquisition, Chris O’Malley — CEO of Compuware — said: “Both companies have been leaders in mainframe innovation over the last five years and we look forward to combining our complementary solution strengths and common passion for accelerating our customers’ successful digital transformations. Without a doubt, a combined BMC and Compuware is the best, brightest, and most collaborative partner for a new generation of mainframe stewards.”
Bola Rotibi, research director, software development at CCS Insight, said: “It is certainly an interesting acquisition given the fact that both companies are quite established software vendors that had larger footprints and influence in the 90s and the first decade of the 2000s.
“More interesting still is the focus on the mainframe technology and how they have positioned it as an important aspect of the acquisition. This suggests that the technology is perhaps a little more embedded within organisations and offers a greater value proposition for the new workloads anticipated and a strong growth potential to consolidate around.
“This acquisition also reflects the success that IBM has had with its own systems group that is responsible for the mainframe technology and product. In our CCS Instant Insight on IBM’s Q4 and year end results for FY2019 the IBM Systems group saw a quarterly growth increase of 16% which was attributed to strong uptake of z15, the latest version of their mainframe platform and also from strong storage sales.
“The fact that Andy Jassy of AWS took a side swipe at the mainframe during is re:Invent 2019 keynote in Las Vegas, pointing out the move off the platform into their cloud environment and urging more organisations to follow suit, suggests a level of competitive concern for the technology and its growth potential in the market.”
Macquarie Capital and Jefferies LLC acted as financial advisors to BMC and KKR, and Simpson Thacher & Bartlett LLP served as BMC counsel. Credit Suisse served as financial advisor to Compuware, and Kirkland and Ellis served as legal counsel.