BMC Software (NASDAQ:BMC) is being acquired. The backdrop: In this, the season of private equity buyouts, BMC Software appears to have rolled over and barked for activist investors arguing the company is out of touch with the market and drastically needs an ownership makeover.

A private investor group (led by Bain Capital and Golden Gate Capital along with GIC Special Investments and Insight Venture Partners) will pay $46.25 per share in cash, or some $6.9 billion for the company. The transaction is expected to close later this year based on approval from BMC shareholders and regulatory approval.

“After a thorough review of strategic alternatives, the BMC board of directors is pleased to reach this agreement, which provides shareholders with immediate and substantial cash value, as well as a premium to our unaffected share price,” said Bob Beauchamp, BMC chairman CEO.

The deal looks like a win for hedge fund Elliott Management, which owns slightly less than 10 percent of BMC and has been loudly pressuring the software maker to sell itself, arguing that it had passed up a significant revenue opportunity to move to SaaS-based software as had many of its competitors.

BMC competes in the IT management market with CA (NASDAQ: CA), Compuware (NASDAQ: CPWR), Hewlett-Packard (NASDAQ: HPQ), IBM (NYSE: IBM), Oracle (NASDAQ: ORCL) and others selling software to manage networks, applications, services and IT systems. Last December, Compuware rebuffed a $2.3 billion takeover bid from Elliott.

Differing Views

BMC and Elliott have been scuffling for a while with Elliott contending that BMC’s board was out of touch with the market, and the company, to improve efficiency, needed to cut its workforce. BMC’s top brass, while admitting the software maker had lagged on moving to subscription-based software, responded to the Elliott challenge by buying back $1 billion in company stock.

Last summer, BMC and Elliott agreed that the investor would not bid or nominate board members absent the software maker’s consent, an agreement that expired on March 23.

In its most recent quarter ended Dec. 31, BMC posted $580.2 million in sales, up about 6 percent from the same period last year. Earnings, however, slid 11.3 percent to $106.3 million, below Wall Street expectations. The company blamed drops in licenses in its enterprise and mainframe services management businesses. It also worried out loud that Elliott’s full-throated campaign to push a buyout had scared off some customers and rattled investors.

As expected, Elliott praised the deal. “Elliott applauds the BMC Software board and executive leadership for delivering this value-maximizing outcome for stockholders, which both contains a go-shop provision and reflects what we believe is a substantial premium to BMC’s unaffected stock price,” said Jesse Cohn, Elliott portfolio manager.

During the deal’s “go-shop” period, BMC can solicit bids from other buyers.

Word of a possible BMC buyout surfaced in late March on news that bids had been submitted by three groups of possible investors, including venture firms KKR, TPG Capital, Bain Capital and Golden Gate Capital along with Thoma Bravo. The BMC deal comes amid Dell’s maneuverings to finalize its $24.4 billion buyout that has been challenged by billionaire investor Carl Icahn and affiliates.