Compuware Attracts New Buyers - Analyst Blog
06 Mars 2013 - 10:30AM
Zacks
Several new private equity funds,
such as Apax Partners LLP and Hellman & Friedman LLC, have
emerged as prospective buyers for Compuware Corp.
(CPWR), reported Bloomberg. Earlier, Compuware contacted
Blackstone Group LP, TPG Capital LP and Golden Gate Capital
regarding the proposed sale.
It is noteworthy that Compuware had
rejected a $2.3 billion bid from activist investor Elliott
Management Corp. in Jan, 2013, citing the $11.00 per share offer by
Elliot inadequate.
In late January, the company also
initiated certain steps to increase shareholders’ value and
profitability by stringent cost controlling measures. Compuware
announced a 3-year restructuring plan that will save $60.0 million.
For fiscal 2014, the plan is expected to save a minimum of $20
million.
Compuware will pay a dividend of 50
cents per share beginning in the first quarter of fiscal 2014.
Additionally, Compuware announced plans to distribute its remaining
shares in Covisint Corp directly to shareholders after completing
the Initial Public Offering (“IPO”) of the 20% Class A stock. The
initiatives not only reflected Compuware’s strong balance sheet but
also indicated chances of further restructuring in the form of
headcount reductions and divestitures.
Although a better buyout offer will
be positive for investors, we believe that the prevailing sluggish
macroeconomic conditions will likely to act as an impediment toward
fetching a higher price.
We believe that Compuware’s
recently announced initiatives are positive for shareholders over
the long term. The company’s product portfolio, which comprises
mainframe software, project-management tools collaboration
technology and performance-management services for cloud computing
and mobile applications are expected to be the growth
potentials.
Moreover, its recent
better-than-expected third quarter results reflect continued demand
in the APM and Covisint business, which will boost further growth
going forward. We believe that new program wins and introduction of
new products will help Compuware to counter strong competition from
the likes of BMC Software Inc. (BMC), CA
Technologies (CA) and International Business
Machines (IBM) going forward.
Currently, Compuware has a Zacks
Rank #2 (Buy).
BMC SOFTWARE (BMC): Free Stock Analysis Report
CA INC (CA): Free Stock Analysis Report
COMPUWARE CORP (CPWR): Free Stock Analysis Report
INTL BUS MACH (IBM): Free Stock Analysis Report
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