KKR Reportedly Explores $1.5B Sale of BMC Helix
KKR is exploring a sale of its IT service management platform, BMC Helix, for a potential price of $1.5 billion, according to sources. The move suggests the private equity firm is engaging in ongoing portfolio rotation. A potential sale would monetize a mature software asset at a time when valuations for such platforms are considered attractive.
- KKR acquired BMC Software for approximately $10 billion in 2018, taking it private from an investor group that included Bain Capital and Golden Gate Capital, which had acquired BMC for $6.9 billion in 2013. - The potential sale follows a strategic decision announced in October 2024 to separate the broader BMC Software into two entities: "BMC" for mainframe software and "BMC Helix" for IT Service Management (ITSM), with the separation intended to be effective in early 2025. - Prior to the separation plan, BMC had confidentially filed for an IPO in 2023, with reports suggesting a potential valuation for the combined company of up to $15 billion. - The targeted $1.5 billion valuation for BMC Helix is reportedly based on approximately $150 million in annual core profit and $750 million in annual recurring revenue, implying a valuation multiple of 8x to 10x its core profit. - Investment bank Jefferies is advising on the sale, which has reportedly drawn initial interest from both other private equity firms and corporate buyers. - A successful sale of BMC Helix could precede a 2026 IPO for the remaining mainframe-focused BMC business, allowing KKR to further monetize its investment. - BMC Helix operates in the growing IT Service Management (ITSM) market, where it competes with industry leader ServiceNow, as well as offerings from Atlassian, IBM, and Broadcom. - The global ITSM market is projected to grow significantly, with a compound annual growth rate (CAGR) estimated between 14.4% and 16.0%, driven by trends like the adoption of AI, cloud computing, and automation.
