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Compuware To Be Purchased By Private Equity Firm For $2.5B

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By Edward Cardenas

DETROIT (CBS Detroit) – Detroit-based Compuware will be purchased by private equity firm Thoma Bravo for $2.5 billion and become a privately-held company, according to reports.

The sale of the Detroit-based technology firm to the San Francisco-based private equity investment firm was announced Tuesday in a release.

“Compuware is now best suited to focus on its core mainframe and APM businesses as a private-equity backed company, where we can continue to serve our customers in a competitive environment with greater flexibility to take a long-term approach,”said Bob Paul, Chief Executive Officer of Compuware, in a release.

Under the terms of the agreement outlined in the release, pending shareholder approval, Compuware shareholders will receive an aggregate value of approximately $10.92 per share.

Compuware has approximately 7,100 employees, and the future of the company’s Detroit’s headquarters was not discussed in the press release.

“Organizations are increasingly relying on mission-critical technologies and applications to reach customers and grow their businesses, and Compuware’s solutions, including Compuware APM, are the leading choice by many of the world’s largest organizations for ensuring those applications perform seamlessly,” said Orlando Bravo, a managing partner at Thoma Bravo, in a release. “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.”

The Compuware board of directors unanimously approved the agreement and recommends that Compuware’s shareholders approve the transaction, according to the release. The transaction, which is expected to close by early 2015, is subject to approval from Compuware’s shareholders, regulatory approvals, and other customary closing conditions. The closing of the transaction is also subject to the completion of a sale of Covisint.

“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,” Gurminder S. Bedi, Independent Chairman of the Compuware Board, said in a release. “This agreement provides shareholders with immediate and substantial cash value, a significant premium to our share price, and the ability to complete the Covisint spin-off to shareholders. Thoma Bravo is an ideal partner for Compuware, adding significant application software, services, and financial expertise.”

Additionally, Compuware has agreed to immediately discontinue its quarterly cash dividend. At closing, Thoma Bravo will acquire 100% of Compuware’s outstanding shares and Compuware will become a privately-held company.

Compuware previously was an acquisition target, according to the Wall Street Journal. Elliott Management Corp. tried to buy the company in 2012 with an unsolicited $11-a-share bid that valued Compuware at around $2.4 billion.

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