Data center automation software provider BladeLogic (BLOG) has agreed to be acquired by BMC Software (BMC) for $28 a share, or approximately $800 million. The deal values BladeLogic above its IPO price of $17 a share when it went public in July and Friday's closing price of $23.61, but slightly below the stock's trading high of $31 a share in late December.
BMC's move is the latest in a series of deals in which large players in the data center sector have acquired smaller firms with expertise in data center automation, most notably HP's acquisition of Opsware for $1.6 billion.
"Organizations around the world will spend more than $140 billion dollars this year running data centers," said Bob Beauchamp, BMC's president and chief executive officer. "Automation is the only way IT can bring this spending under control and still meet the reliability and time-to-market requirements of their businesses. BMC's acquisition of BladeLogic will create the new IT Service Automation leader, unique in its ability to provide these critical capabilities. It is a natural and very significant next step in our vision of Business Service Management."
"When it comes to data center management, IT organizations have learned the hard way that the architecture you start with is the architecture you're stuck with," said Dev Ittycheria, BladeLogic's president and chief executive officer. "From day one, we focused on developing an architecture specifically designed for managing today's complex data center. Our growth and competitive win rate is strong evidence that we got this right. Our award-winning, next-generation architecture will be a natural extension of BMC's BSM platform."
The acquisition will combine BMC's Business Service Management (BSM) platform with BladeLogic's data center automation solutions. BMC said the deal marks a continuation of BMC's strategy to preserve the "purpose built" capabilities of each company's products, as demonstrated by BMC's other recent successful acquisitions.
BMC said it expects this transaction to "significantly accelerate the company's top-line growth," and be slightly dilutive to non-GAAP earnings in fiscal year 2009, including the write-down of deferred revenues and one time integration and retention expenses, and accretive to non- GAAP earnings in fiscal year 2010.
The acquisition will be conducted by means of a tender offer for all of the outstanding shares of common stock of BladeLogic, followed by a second-step merger. The board of directors of BladeLogic has unanimously recommended that the stockholders of BladeLogic accept the offer.