BMC buys Marimba for US$239m

BMC Software has agreed to acquire Marimba for US$239 million in cash to expand the capabilities of systems and applications management software.

Under the deal, US-based BMC would pay US$8.25 in cash for each Marimba share. BMC expected to complete the acquisition in its second fiscal quarter from July to September, pending approval from regulators and Marimba stockholders.

News of the takeover bid drove Marimba's NASDAQ stocks up US$3.16, or 65 percent, to US$8.03 in Thursday's early afternoon trading. BMC stock was down US$1.90, or 9.7 percent, to US$17.60.

BMC had been on a buying spree to build out its data-collecting products and link the information to service-level agreements.

If the buyout went ahead, Marimba's software change and configuration management technology would be incorporated in BMC's Remedy software for IT-service management.

That software included Remedy change and asset management products. Remedy and BMC's Patrol software were core to the company's business service management strategy.

Marimba's technology solved 'the problem of being able to reliably change computer infrastructure from desktop to data centers without breaking them,' Jim Grant, GM at BMC's Remedy division, said.

Marimba would add to Remedy change and asset management software the ability to move patches, upgrades, configuration changes and more across devices and software on a network, Grant said.

The Remedy software today incorporates an approval process for changes to networked devices and software, provides tracking, monitoring and other management functions.

Mark Ehr, analyst for US-based Enterprise Management Associates, said Marimba technology would also be helpful within Remedy's help desk application. A technician could automatically send a patch or software upgrade to specific desktops.

'Marimba makes sense within the Remedy brand,' Ehr said.

Ehr, however, questioned the price suggested for Marimba, given that revenue last year was only US$40.88 million. 'It seems like a lot money,' Ehr said. 'But [BMC]obviously sees some strategic value to it.'

BMC's largest competitors in system and application management include HP and Computer Associates.

BMC had just reported higher profits and revenues for its fourth fiscal quarter ended 31 March. Revenues rose five percent to US$400.2 million, compared to the same period a year ago. Earnings, based on generally accepted accounting principles, were US$36.9 million, or 16 cents a share, compared to US$20.6 million, or nine cents a share, a year ago.

The company expects revenue of US$345 million to US$355 million, with earnings from 12 US cents to 16 US cents a share. For the fiscal year, BMC said it was 'comfortable' with current analyst consensus estimates of revenue of US$1.52 billion and earnings of 77 US cents a share, excluding special items.