April 29, 2004 7:48 AM PDT

BMC snaps up Marimba

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BMC Software plans to spend $239 million to acquire Marimba, continuing a consolidation trend in the management software arena.

BMC said Thursday that once the cash transaction is complete, the company will incorporate Marimba's configuration management software into its Remedy line of customer support and network management software. Taking into account Marimba's cash balance, the net purchase price will be $187 million. The company expects to complete the purchase in the second quarter.

Also Thursday, BMC announced its financial results for its fiscal fourth quarter, which ended March 31. The company said its revenue climbed 5 percent to $400 million, compared with the same period a year ago. Its net earnings on a GAAP basis were $36.9 million, or 16 cents per share, compared with $20.6 million in the same period last year.

Excluding special items, the company's earnings were $40.8 million, or 18 cents per diluted common share. On this basis, the company missed its own guidance range of 21 cents to 25 cents per share. An analysts' consensus figure was not immediately available from First Call.

BMC makes administration software for running company networks. In 2002, it acquired software company Remedy from Peregrine Systems.

The company intends to fill out the Remedy product line with Marimba's tools for automatically sending out software updates, the company said.

Paul Crisci, managing director of Broadview International, a division of Jeffries and Co., advised Marimba on the deal. Crispi said that once Marimba's two main rivals--On Technology and Novadigm--were acquired by Symantec and Hewlett-Packard, respectively, it made sense for Marimba to look for a larger company to buy it.

"Suddenly having Symantec and HP competing against you, the odds are stacked against you," Crisci said. "The larger players are consolidating this entire market segment. This particular functionality (that Marimba provides) is very critical."

Marimba was launched in 1996 and was closely associated with much-hyped "push technology" for sending content and data out to desktop computers. The Mountain View, Calif.-based company, founded by former Sun Microsystems executive Kim Polese, sells software for automatically sending software patches and updates to computers over corporate networks and mobile devices.

Polese left the chief executive position in 2000 and stepped down as chairman of the company's board in November.

The BMC acquisition follows a number of other purchases in the systems management area during the past year. IBM purchased Candle last month to fill out its management software line, and Hewlett-Packard has acquired a number of smaller management companies.

Marimba on Thursday said that its revenue for the first quarter this year slipped to $8.3 million, down from $10.1 million during the same period last year. The net loss for the first quarter was $1.2 million.

 

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