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.
Elliott Management disclosed a stake in Compuware in November 2012, and a month later offered to buy the company for $11 per share.
Compuware took Covisint public in October 2013. The company also sold three business unites to Marlin Equity Partners for $160 million in January. Later that month, the hedge fund and Compuware reached a deal. Elliott Management gained two seats on the board and Compuware set up a committee to review its business.
Goldman, Sachs & Co. advised Compuware, which received counsel from Skadden Arps Slate Meagher & Flom lawyers Stephen Arcano, Richard Grossman, Stuart Finkelstein, Neil Leff, Thomas Hughes, Justin Herridge and Daniel Goldmintz.
Thoma Bravo retained Kirkland & Ellis lawyers Gerald Nowak, Theodore Peto, Bradley Reed, Francesco Penati, Seth Traxler and David Kung.