KKR acquires BMC Software from investor group for undisclosed amount

Over the last year, the market has witnessed an increasing number of private equity firms investing in the technology sector, and the trend is gathering further momentum this year. For investment firms shifting their focus to technology, the main lure is the growth prospects of start-ups and early-stage information technology companies.

KKR & Co. (KKR), a New York-based private investment firm, Tuesday agreed to acquire BMC Software from a group of investors led by Bain Capital and Golden Gate Capital, as part of expanding its technology assets. The transaction is expected to close in the third quarter of 2018.  However, the financial terms of the deal are not known.

The buyout comes more than five years after an investor group, including Bain Capital, acquired BMC for $6.9 billion.

While KKR’s core business is the ownership and management of real estate assets, of late, the company has been investing in enterprise software firms. BMC provides technology to businesses to manage and optimize information technology on the cloud and mainframe platforms.

The financial terms of the transaction, which is expected to close in the third quarter of 2018, are not known

“We are thrilled to partner with the talented BMC team to accelerate growth—including via M&A—building on BMC’s deep technology expertise and long-standing customer relationships,”  said KKR executive Herald Chen.

In a similar transaction in the tech sector, investment firm Francisco Partners signed an agreement to acquire payments solutions provider Verifone Systems (PAY) for about $3.4 billion last month. On completion of the transaction, Verifone will become a privately held company.

Verifone, which pioneered the point-of-sale card reader business, has been struggling to stay afloat as conventional card readers became obsolete with the emergence of new payment technologies, resulting in operational losses and market value depletion.

Earlier this month, e-commerce solutions provider CommerceHub was acquired by private equity firms GTCR and Sycamore Partners for $1.1 billion. Pursuant to the acquisition, the Albany, New York-based CommerceHub went private.

Following the buyout news, KKR stock lost about 1.5% in early trading Tuesday, after making notable gains over the past six months.