BMC to Buy BladeLogic for $800 Million

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BMC ramps up its competitive edge in infrastructure with its latest purchase of BladeLogic.

BOSTON (Reuters) - BMC Software Inc said on Monday it would buy BladeLogic for about $800 million, adding a line of programs that help boost automation within its customers' data centers.

BMC said it plans to pay $28 a share in cash, about a 19 percent premium to BladeLogic's $23.61 closing price on Friday. BladeLogic shares rose 16 percent on Monday to $27.40.

In acquiring BladeLogic, BMC is beefing up its portfolio as it looks to win business away from Hewlett-Packard Co, which sells similar software through its purchase of Opsware.

BMC already sells a line of software for managing the computer systems of its customers, from mainframes to servers and PCs. Its programs perform what have become relatively routine tasks such as helping workers quickly deploy security patches throughout a company's computer network.

The programs from BladeLogic can simultaneously make more advanced changes across dozens of systems.

"We coveted this business for a long time. Getting them to sell was not an easy process. It took time," BMC Chief Executive Bob Beauchamp said in a conference call.

BladeLogic CEO Dev Ittycheria said on the call that his company's board had solicited and received other bids after getting a proposal from BMC. He declined to elaborate on the bidding process.

Analysts have speculated for months that BladeLogic would be acquired, with BMC and VMware Inc mentioned as potential buyers.

BMC shares fell 5.4 percent to $31.95 on a day when the Nasdaq Composite Index was down 1.4 percent. BladeLogic shares have nearly doubled from a 52-week low of $14.51 at the end of January.

The agreement will slightly reduce BMC's operating earnings in fiscal year 2009, but add to its profit in fiscal 2010, BMC said.

(Additional reporting by Franklin Paul; Editing by Brian Moss)

This article was originally published on 2008-03-17
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