Compuware Agrees To Be Taken Private By Thoma Bravo For About $2.5 Bln

(RTTNews) - Compuware Corp. (CPWR), a Detroit-based software developer, said Tuesday that it agreed to be acquired by private equity investment firm Thoma Bravo LLC, in a transaction valued at about $2.5 billion.

The Compuware board unanimously approved the agreement and recommends that Compuware's shareholders approve the transaction. At closing, Thoma Bravo will acquire 100% of Compuware's outstanding shares and Compuware will become a privately-held company.

As per the terms of the agreement, pending shareholder approval, Compuware shareholders will receive an aggregate value of about $10.92 per share, representing a premium of about 17 percent to the Company's stock price as of the close of trading on Friday, August 29, 2014.

Compuware has agreed to immediately discontinue its quarterly cash dividend.

Elliott Management, which owns approximately 9.5 percent of Compuware's common stock, has entered into an agreement with Thoma Bravo agreeing to vote its shares in favor of the transaction.

Thoma Bravo will pay a cash purchase price of $10.43 for each outstanding share of Compuware common stock, less the pro rata portion of the applicable corporate tax that will be owed in connection with the spin-off of Covisint, currently estimated at $0.18 per share based on the current market price of Covisint, for a net cash payment of approximately $10.25 per share.

The parties have agreed that within 60 days following the date of the merger agreement, Compuware will effectuate the pro rata distribution to its shareholders of the remaining shares of Covisint owned by Compuware, resulting in a distribution of Covisint shares representing approximately $0.67 per share of Compuware common stock based on the closing price of Covisint on Friday, August 29.

During the 60-day period, Compuware may seek a higher value alternative for its Covisint shares, in which case the proceeds, net of tax and certain charges, of such disposition will be paid to Compuware shareholders.

The transaction, which is expected to close by early 2015, is subject to approval from Compuware's shareholders, regulatory approvals, and other customary closing conditions. The closing of the transaction is also subject to the completion of a disposition of Covisint.