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BMC Software explores merger with CA: source
[SAN FRANCISCO] Privately owned BMC Software has contacted banks about putting together a financing package for an acquisition offer for enterprise software maker CA Inc, according to a source familiar with the matter.
The deal would combine two of the largest US providers of information technology management software and would be the biggest leveraged buyout since Dell's US$24.4 billion take-private transaction in 2014.
BMC's bid for CA, which has a market capitalisation of more than US$13 billion, would require a large financing package and equity financing from BMC's private equity owners, Bain Capital and Golden Gate Capital, the source said on Tuesday.
The source cautioned that no deal is certain and asked not to be identified because the deliberations are confidential. CA and BMC could not immediately be reached for comment. Bain Capital and Golden Gate declined to comment.
CA shares rose 14.8 per cent to US$36.24 in after-hours trading after Bloomberg News reported that BMC and CA are in early-stage talks about a potential merger.
CA, formerly known as Computer Associates, has its roots in providing mainframe computers used by large institutions like banks. It has been trying to shift its business to the cloud, and announced in March that it was acquiring application security firm Veracode for US$614 million.
BMC, which provides software that helps corporations organise their tech support functions, was taken private for US$6.9 billion in 2013 by Golden Gate and Bain Capital, after pressure from activist hedge fund Elliott Management Corp.