BMC Software to Purchase BladeLogic

Updated from 11:26 a.m. EDT

SAN FRANCISCO -- BMC Software(BMC Quote) will acquire data-center automation company BladeLogic (BLOG Quote).

Within the next 10 days, BMC, which develops software that manages business systems, will make a tender offer of $28 a share, or approximately $800 million, including cash acquired, followed by a second-step merger. BMC's board has approved the deal.

The Houston-based software company expects BladeLogic to speed BMC's top-line growth. The acquisition will hurt earnings until fiscal year 2010, the company said. The deal is expected to close during the quarter that ends in June.

BMC shares were down $1.86, or 5.5%, to $31.91 in recent trading. BladeLogic was up $3.70, or 15.7%, to $27.31.

Dilution to BMC's earnings in 2009 will be about 10 cents a share. One-time expenses, such as a writedown of BladeLogic deferred revenue and integration costs, will account for 5 to 6 cents of dilution, Stephen Solcher, chief financial officer of BMC, said on a conference call.

BladeLogic founder and CEO Dev Ittycheria said on the call that the company fielded other offers after BMC came forward. "Ultimately, BMC proposed the most compelling transaction." Ittycheria will join BMC's management team.

BladeLogic, which went public in July 2007, posted revenue of $62.7 million and EPS of 5 cents last year. Revenue is expected to grow 43% to $89.4 million, according to Thomson Financial.

The acquisition positions BMC to capitalize on strong growth in the market for data automation software, BMC CEO Bob Beauchamp said.

The integration will require no difficult choices between software architectures, and some of BMC's other acquired product lines were already integrated with BladeLogic software, Beauchamp said. "It plugs right in."

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