Compuware to Go Private - Analyst Blog
22 Febbraio 2013 - 4:20PM
Zacks
Compuware Corp.
(CPWR) is reportedly up for sale.
According to a recent news feed from Reuters, Compuware management
has recently met private equity firms such as Blackstone Group LP,
TPG Capital LP and Golden Gate Capital regarding a potential
deal.
The move comes as a surprise as the
Detroit-based company rejected a $3.2 billion bid from activist
investor Elliott Management Corp recently in Jan, 2013. Compuware
cited the $11.00 per share offer as inadequate and announced a
number of initiatives that included a dividend payment for the
first time in its history.
Compuware will pay a dividend of 50
cents per share beginning first quarter of fiscal 2014. The company
announced a 3-year restructuring plan that will save $60.0 million
annually. For fiscal 2014, the plan is expected to save a minimum
of $20 million.
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 ($64.4 million in cash
& cash equivalents) but also indicated chances of further
restructuring in the form of headcount reductions and
divestitures.
In such a scenario, the private
buyout rumors not only create uncertainty for investors but also
affect the credibility of Compuware’s initiatives. Although a
better buyout offer will be positive for investors, we believe that
current sluggish macro-economic conditions are likely to act as an
impediment towards fetching a higher price.
We believe that Compuware’s
recently announced initiatives are positive for shareholders over
the long term. The company is optimistic regarding its cloud
computing and mobile growth strategies. 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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