BMC Buys Marimba, EPS Falls Short

BMC Software ( BMC) reported fiscal fourth-quarter earnings Thursday that fell short of analyst estimates, and announced plans to acquire Marimba ( MRBA) for $239 million.

BMC said it will acquire Marimba -- a dot-com survivor, long been rumored an acquisition target -- at a purchase price of $8.25 a share. That's a hefty 69.4% premium above Marimba's closing price Wednesday of $4.87.

After adjusting for Marimba's cash balance, however, the net purchase price is actually $187 million, BMC said. BMC expects the acquisition of Marimba to be accretive to earnings within 12 months of closing the deal.

Shares of BMC were hammered, down $2.29, or 11.7%, to $17.21 in recent trading. Shares of software configuration management maker Marimba shot upward, recently up $3.17, or 65%, to $8.04.

Separately, Houston-based BMC reported, under generally accepted accounting principles, a net income of $36.9 million, or 16 cents a share, for the fiscal fourth quarter, which ended March 31. That's an increase from net income of $20.6 million, or 9 cents a share, in the same period a year earlier.

Excluding charges, BMC earned pro forma net income of $40.8 million, or 18 cents a share, in the fourth quarter. That compares to 17 cents a year ago but fell short of the 23-cent consensus estimate gathered by Thomson First Call and the company's guidance of 21 cents to 25 cents a share.

The company said operating expenses were higher than expected due to an $11 million sequential increase in commission costs, primarily related to an increase in deferred revenue, which represents new sales. License bookings -- a measure of new license contracts -- increased 35% year over year in the fourth quarter.

Revenue rose 5.1% from a year ago to $400.2 million.

In the just-started fiscal first quarter, BMC expects revenue to range from $345 million to $355 million and pro forma earnings to range from 12 cents to 16 cents a share. Analysts were expecting sales of $353.8 million in revenue and earnings of 14 cents a share.

For fiscal 2005, BMC said it is comfortable with the current analyst consensus estimates calling for $1.52 billion in revenue and 77 cents in pro forma earnings.

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