BMC buys Remedy; Peregrine parent in Chapter 11
- By Jack Vaughan
[SEPTEMBER 16, 2002] - Struggling Peregrine Systems yesterday agreed to sell the assets of its Remedy help center software group to BMC Software for $350 million in cash and the assumption of some Remedy liabilities. At the same time, Peregrine’s CEO Gary Greenfield announced that Peregrine filed for Chapter 11 bankruptcy reorganization.
BMC also agreed to provide Peregrine with debtor-in-possession financing of up to $110 million, to be charged against the purchase price of Remedy. The transaction is subject to approval of a bankruptcy court.
Remedy was one of the few jewels Peregrine picked up in a buying spree that preceded disclosures of financial problems. In May of this year, Peregrine announced the resignations of Chairman and CEO Steve Gardner, and CFO, and that it would restate financial results for several years. “Chapter 11 gives us time to resolve our financial and legal issues,” said recently hired Peregrine CEO Gary Greenfield, “Remedy customers will be in good hands with BMC.”
When Peregrine initially announced its purchase of Remedy in 2001, the stock deal was valued at about $1.08 billion. Remedy was in the process of expanding its initial help desk product line into a fuller services and support engine offering at the time of the purchase. Remedy generated about $250 million in revenues in the 12-month period ending June 30, 2002, according to Peregrine.
“Remedy has remained a strong and well-managed company despite the troubles of its parent company,” said Bob Beauchamp, president and CEO, BMC, in a press conference.
''Remedy’s business is a compelling fit for BMC Software, and will help us achieve our vision to be the leading enterprise management provider,” said Beauchamp. He said key customers had asked for greater integration of systems management and service management capabilities. Remedy, he added, will operate as a separate business within BMC.
Jack Vaughan is former Editor-at-Large at Application Development Trends magazine.