BMC Software IPO: Everything you need to know about BMC

What do we know about the BMC Software IPO?

On February 17th Bloomberg News reported BMC Software confidentially filed for an IPO. The Houston-based technology company did not set a specific date to go public, but analysts expect the listing to occur in 2024 as more tech companies move forward with IPO plans.

The insider named Goldman Sachs Group Inc. as lead underwriter in the filing. They also told Bloomberg News that BMC might also consider a sale if the IPO market fails to fully recover. ARM, Klaviyo and Instacart have all recently debuted on public exchanges after a years-long slowdown due to economic uncertainty and failed listings. How these companies perform in the public markets can make or break whether other companies list.

Because BMC filed confidentially, there has been little coverage of the company’s potential debut. Companies might file confidentially to avoid media scrutiny or to keep from sharing their financials with competitors. Keep reading to learn what we do know about BMC Software and how the company’s valuation might have changed since its filing in February.

Explore other upcoming IPOs to watch.

BMC Software was first listed as a public company in 1988, but it was removed in 2013 when several private companies including Bain Capital and Golden Gate Capital took the company private. In 2018 BMC was bought again by private equity firm KKR & Co. for $8.5 million. KKR is the current owner.

How to trade the BMC Software IPO?

Once BMC Software has been listed, you’ll be able to trade its shares in the same way as any other stock on the market.

In the meantime, you can trade shares with City Index in these easy steps:

1. Open a City Index account, or log in if you’re already a customer
2. Search for the company you want to trade in our award-winning platform
3. Choose your position and size, and your stop and limit levels
4. Place the trade

Alternatively, you can practise trading shares in a risk-free demo account.

What does BMC Software do?

BMC Software offers dozens of products focused on service management, automation, operations and mainframe solutions. Ultimately BMC bills itself as an IT management provider.

BMC was founded in 1980 as a software developer for IBM mainframe systems and after a decade expanded its offerings to other systems such as Windows. Today, BMC software serves over 10,000 businesses, including 86% of the Forbes Global 50, and boasts more than 6,000 employees.

BMC’s product offerings can be separated into three main categories: automated mainframe intelligence, application workflow orchestrations and SaaS solutions.

Automated mainframe intelligence (BMC AMI)

BMC’s suite of mainframe operations focuses on consistently updating a business’s mainframe software to maintain a competitive edge with regard to reaction speed, reliable service and tight security. A mainframe describes a corporation’s central data processing hub. It is the heart of any technology company that links users and information among various terminals.

Some of BMC’s newest offerings include software that connects traditional mainframe infrastructure to interspersed cloud and hybrid information systems.

Control-M application workflow orchestrations

Control-M includes all BMC offerings focused on how to build and manage production workflows. This software pulls in disparate applications, systems, tools and workflows to automate and clarify within a single point of orchestration. Control-M software includes DevOps, Managed File Transfer and Workload Automation.

BMC Helix SaaS solutions

BMC Helix includes all of BMC’s software-as-a-service (SaaS) products and many AI-leveraged operations such as BMC Helix ITSM, an AI-powered IT service management, and BMC Helix Virtual Agent, an AI chatbot for customer self-service.

How much is BMC Software worth?

BMC Software could be worth anywhere between $14 and $20 billion. At the time news leaked of BMC’s confidential filing in February, analysts projected a possible market valuation of around $14 to $15 billion. However, that was almost six months ago. A recent analysis on Forbes gauges BMC could reach upwards of $20 billion in market capitalisation.

This boosted valuation comes from estimating the revenue-to-market-cap for BMC’s public competitors: Splunk, ServiceNow and Dynatrace. Averaged together, the three companies each have a market cap 8.6 times greater than their revenue. If compared to BMC’s most recent revenue figures, $2.0 bn for 2022, the company’s market capitalisation is projected to reach $20.64 billion. Of course, these projections may change if BMC comes forward with more information, such as a target valuation, ahead of going public.

How does BMC Software make money?

BMC Software makes money through its subscription-based pricing for 38 different products for businesses to choose from. The Software as a Service (SaaS) business model provides software applications to users via the internet on a subscription basis. Users access the software through web browsers, eliminating the need for individual installations and allowing remote accessibility from any internet-enabled device. SaaS subscriptions are typically billed monthly or annually, offering predictable revenue for providers and cost-effective flexibility for customers.

SaaS providers handle software maintenance, updates, and security, ensuring users always have access to the latest features and protection. The model often employs multi-tenancy, where multiple customers share a single software instance while keeping their data separate.

Scalability is a key feature, enabling organizations to adjust user licenses and features as needed. Collaboration tools and integration capabilities are common, promoting remote teamwork and seamless connections with other software tools.

Security and compliance measures are stringent to protect customer data, and customer support is typically available through various channels. SaaS applications often include analytics and reporting features, helping organizations make data-driven decisions.

In summary, SaaS offers cost-effective, accessible, and scalable software solutions with robust support, security, and collaboration features. Its subscription-based model has gained popularity across various industries for its convenience and flexibility.

Is BMC Software profitable?

BMC Software’s reported revenue for 2022 is $2.0 billion. Since BMC filed confidentially, the company has not reported other financial figures. So, it is currently unknown whether BMC Software is profitable.

What is BMC Software’s business model?

BMC Software has evolved greatly over the past forty years. It most recent business developments include an expansion into cloud-based offerings and AI-powered operations.

The Houston-based firm also uses acquisitions to advance its innovation and expansion of products. Integrity Solutions, Remedy Software, Compuware Corporation and Model9 are just a few of its dozens of acquisitions.

Who are BMC Software’s competitors?

BMC Software will enter a crowded marketplace of publicly listed IT management providers. Prominent companies include those previously used to project a possible market capitalisation and the high-performing Datadog (whose revenue-to-market-cap multiplier is 23x).

Who owns BMC Software?

BMC is owned by KKR & Co., a publicly traded investment management company based in New York City. KKR acquired BMC in October 2022 for $8.3 billion including debt.

The management firm is known to hold subsidiaries for a decent amount of time, and a listing or sell off of BMC after five years would be considered a short hold.

BMC Software management team

The BMC Software management team features Ayman Sayed as the president and CEO, Eduarda Camacho as COO, Paul Cant as CRO, Michelle Carbone as COO, Ram Chakravarti as CTO, Martyn Etherington as CMO and Marc Rothman as CFO.

The BMC board of directors is as follows:

• Ayman Sayed
• Bill Green
• John Park
• Donald Wagner
• Blair Christie
• Leah Sweet
• Lewis Steverson