Shareholders in BMC Software Inc. will receive $6.9 billion to sell the corporate-software developer to a group of private-equity firms, but the buyers, led by Bain Capital LLC and Golden Gate Capital, only intend to pay $1.25 billion in cash out of their own pockets, the Wall Street Journal reported today. The rest will come from debt raised by BMC to finance its takeover. The little-noticed acquisition is another milestone in the return of cheap debt and higher-risk deals to Wall Street: The cash put down by BMC's private-equity buyers is the lowest as a percentage of the purchase price of any buyout with loans exceeding $500 million since 2008, according to data-provider Thomson Reuters LPC. The last buyouts with equity contributions comparable to BMC's were those of Harrah's Entertainment Inc. in 2008 and Clear Channel Communications Inc. in 2007, according to data from Thomson Reuters. Both firms have struggled under the resulting leverage and restructured some of their debts, triggering downgrades by credit raters.
