Software maker Compuware, under pressure from investors for more than a year over its poor performance, agreed to be taken private by investment firm Thoma Bravo in a deal valued at about $2.5 billion.
Compuware’s shareholders will receive $10.92 per share, comprising $10.25 in cash and 67 cents in shares of Covisint, in which the company owns an 83 percent stake.
The offer represents a 17 percent premium to Compuware’s closing on Aug. 29. Shares of Compuware rose as much as 12.8 percent to $10.55. Shares of Covisint, which was spun out by Compuware last September, were down eight percent.
Compuware’s software is used by companies such as Cisco Systems, BT and Domino’s Pizza to manage complex applications.
Its results have been hurt by weak IT spending and a slowdown in orders from customers, resulting in calls by shareholders to restructure its business or sell the company.
Activist hedge fund Elliott Management first invested in the stock in December 2012 when shares were trading around $8 and made an offer of $11 per share, which was rejected by the company.
Since then, Elliott and other investors have pushed Compuware to create value with an initial public offering of Covisint and divestment of assets.
Elliott, which owns about 9.5 percent of the company, said on Tuesday it would vote in favor of the deal.
“The management has spent a lot of time making it a less complicated business and that probably helped at the end of the day in coming up with a fair price for their assets,” Evercore Partners analyst Kirk Materne told Reuters.
Jefferies, Credit Suisse and Deutsche Bank have agreed to provide debt financing for the deal.
Goldman Sachs was the financial adviser to Compuware.
(Reporting by Arathy S. Nair and Abhirup Roy; additional reporting by Liana Baker; editing by Joyjeet Das and Saumyadeb Chakrabarty.)