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Serena Software Going Private

Silver Lake will lead the $1.2 billion LBO.
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Serena Software


agreed to be taken private by Silver Lake Partners Friday in a $1.2 billion leveraged buyout that pays existing stockholders a 1% premium to Thursday's close.

News of the $24-a-share deal was accompanied by a bullish profit forecast in which Serena said it will earn 35 cents or 36 cents a share before items in the third quarter on revenue of $64 million to $65 million. Analysts were forecasting earnings of 32 cents a share on sales of $60.8 million, according to Thomson First Call.

Serena said its board and a special committee of independent directors approved the buyout, which will pay cash to all existing shareholders and convertible bondholders. The company's founder and largest shareholder, Douglas Troxel, agreed to vote his shares in favor of the transaction.

Serena's shares are up 20% over the last two weeks, closing Thursday at $23.65. The 52-week high is $24.42, touched Feb. 8. That price is also the shares' highest level since February of 2002.

Silver Lake said the transaction will consist of its equity plus debt financing provided by Merrill Lynch, Lehman Brothers and UBS. Serena CEO Mark Woodward, CFO Robert Pender, and "possibly other senior executives" will get equity in the new company, Silver Lake said.