Thoma Bravo Inks $2.5B Deal for Compuware

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.

Jefferies (JEF) , Credit Suisse Group (CS)  and Deutsche Bank (DB)  are providing financing for the deal, which the parties expect to close in early 2015.

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.

More from Mergers and Acquisitions

Could Spotify Be Next on Amazon's Wish List?

Could Spotify Be Next on Amazon's Wish List?

Sprint, T-Mobile Might Have to Do More Than Make Promises to Get Deal Approved

Sprint, T-Mobile Might Have to Do More Than Make Promises to Get Deal Approved

Xerox Received Interest From HPQ Before Fuji Deal: Sources

Xerox Received Interest From HPQ Before Fuji Deal: Sources

Divestitures at Newell Expected in Weeks: Wells Fargo

Divestitures at Newell Expected in Weeks: Wells Fargo

In Biopharma M&A, 'Where There's Real Innovation There's Someone Willing to Pay'

In Biopharma M&A, 'Where There's Real Innovation There's Someone Willing to Pay'