While Dell has captured headlines for months as it attempts the transition from public to private company, BMC Software went private on September 10 without all the drama and shareholder fireworks.
BMC, whose management products are used by thousands of customers around the world, was acquired by a private investor group led by Bain Capital and Golden Gate Capital. Shortly after the transaction was finalised, BMC CEO Bob Beauchamp spoke with IDG Enterprise Chief Content Officer John Gallant about why BMC made the move and what it will mean for users of the company's products.
First and foremost, why did you do this? Why take this step?
There are two answers to that question. The first one is that, as a public company, your first responsibility is to the people who own your company and this was the best outcome for our shareholders. That is the technical answer, that is the financial answer, that is the fiduciary answer and it's why we did it.
Why is it the best outcome for the shareholders?
Because the shareholders were offered a fair price by the investor group of over $46 a share, and we gave our shareholders the ability to vote on it and they voted to take that offer.
The second aspect is that we were fortunate that the investor group that bought our company has a strong vision of growing this company and making it a more competitive, better company for our customers and our employees. That's exciting to me as the CEO who has the opportunity to manage this company.
Let's dig into that. What do you think it will mean for customers? How will this allow you to innovate faster or differently than you would as a public company?
It will give us the opportunity to move a little quicker, as we can take more risk - specifically, longer-term investments with a little less focus on quarterly Wall Street estimates. If we need to invest $10 million this week in new cloud, mobile or SaaS technologies, I don't have to check what the impact to our earnings per share this quarter will be to our share price before we make that decision.
Also, we can shift spending from some things that cost a lot of money as a public company to spend on new products, better support, better services and better customer service.
So essentially all of the costs that are associated with being a public company, those are things that can be reinvested now?
Exactly. Things like the fees we pay the exchange, some of the financial reporting requirements that are quite expensive. Some of those things we'll be able to shift over towards customer value creating investments.
What should your customers expect over, say, the course of the next year as a result of this move?
First, no big changes in terms of how they do business with us. They'll have continuity. They'll have their account teams. They'll have their support teams, the same great customer support that they've grown accustomed to. They should not expect any sudden changes. Over a slightly longer period of time, they should see us be more responsive to new technology shifts, more focused on the full customer experience, more flexible, easier to do business with, and more innovative.
Sometimes when companies go private they do that because they have some difficult things that they want to do out of the public eye. Should people expect any kind of restructuring or major changes in the way the company is positioned?
I would never want to say never, but there's no major restructuring/change in the way we do business planned out at this point or expected. Through the years as a public company, we would do that as we needed to. So I wouldn't want to say that as a private company we never would. But there's nothing specifically about being a private company that would make that more likely at this point.
You operate in a very competitive marketplace. How does this change the landscape for you?
I was thinking the other day that if one of our larger competitors announced they were going private it would worry me a great deal. As a public company you can only move so fast. As a private company you can be more aggressive, move quicker, and maybe be a little less predictable to your competitors. Our announcement, while it is great news for our customers, I think it is bad news for our competitors.