Bankrupt Peregrine sells unit to BMC
Software maker Peregrine Systems sells a unit responsible for service management products to BMC Software for $355 million in cash.
Peregrine, which is trying to reorganize under Chapter 11 bankruptcy protection, sold its Remedy business unit--the maker of Action Request System software. The software is designed to help companies develop applications to automate such business processes as customer support.
BMC, a systems management software company, acquired Remedy to expand its offerings and plans to operate Remedy as a separate organization within BMC.
"This deal allows BMC to tell a better story in the marketplace," said David Breiner, an analyst with Bear Stearns. "By tying their technology-oriented management products with end-user products through Remedy, they are closing the loop from the data center to help desk."
Breiner said BMC had paid a fair price for the Remedy unit.
The sale of Remedy will ultimately make BMC a stronger competitor of Peregrine in the service management market.
"Although Peregrine can viewed as a competitor, their options were somewhat limited. It can be viewed as a small price to pay for viability," Breiner said.
Shares of BMC rose slightly in morning trading, up 19 cents, or about 1 percent, to $17.69.