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Thoma Bravo Inks $2.5B Deal for Compuware

Stocks in this article: CPWR COVS JEF CS DB

NEW YORK (The Deal)-- Shares of Compuware  (CPWR) rose 12% on Tuesday morning as the company announced a $2.5 billion sale to private equity firm Thoma Bravo with the blessing of activist shareholder Elliott Management.

Compuware CEO Bob Paul described the sale as the "capstone" of a series of moves that includes the IPO cloud computing subsidiary Covisint  (COVS) , sales of other assets and the initiation of a dividend.

The moves came under pressure from Paul Singer's Elliott Management, which holds 9.5% of the common stock and appointed two board members in a January deal with Compuware. Elliott Management executive Jesse Cohn described the campaign in a Tuesday statement as "a multi-year process to create value for Compuware shareholders."

Compuware stock gained $1.17, to $10.52, following the news. The company valued the deal at $10.92 per share, though the math is complicated.

Thoma Bravo will pay shareholders $10.43 in cash. However, after subtracting $0.18 per share in tax, the net payment is reduced to $10.25 per share. Within 60 days, investors will also receive 67 cents per share worth of stock in Covisint that Compuware still holds.

Shares of Covisint dropped 41 cents, or 8.5%, to $4.40 on Tuesday morning.

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