Shares of Compuware Corporation (CPWR) are up almost 13% in early trading Tuesday after Dealbook reported the Detroit-based software developer agreed to sell itself to the private equity firm Thoma Bravo for about $2.5 billion.
Under the terms of the agreement, pending shareholder approval, Thoma Bravo agreed to pay $10.92 a share in cash to Compuware shareholders, representing a premium of about 17% to ticker’s PPS as of the close of trading on Friday. The terms also include the valuation Compuwarer’s remaining stake in cloud-software company Covisint, which went IPOd about a year ago.
In a statement Compuware Chairman Gurminder S. Bedi said “[t]his is the right transaction for Compuware at the right time…reflects a thorough board review of strategic alternatives” and includes the ability to complete the Covisint spinoff to shareholders.
Excluding impacts related to Covisint, Thoma Bravo will pay a net $10.25 a share. Hedge fund Elliott Management, which owns a 9.5% stake in Compuware, entered into a deal to vote its CPWR shares in favor of the transaction. Elliott had for years pushed the tech services firm to sell itself.
Once the deal is completed and all of CPWR stock has been acquired, Compuware will become a privately-held company.
Jefferies, Credit Suisse (CS) and Deutsche Bank (DB) have agreed to provide debt financing in connection with the sale.
Compuware shares, which are currently trading at $10.48 each, giving the company a market cap of $2.31 billion, were up nearly 15 percent at one point in pre-market trading.