BMC Notified That Elliott Has Acquired Over 5% of the Company

News Release:

BMC Notified That Elliott Has Acquired Over 5% of the Company

HOUSTON, May 14, 2012 – BMC Software, Inc. (NASDAQ: BMC) (the “Company” or “BMC”), the recognized leader in Business Service Management, today announced that Elliott Associates, L.P. and Elliott International, L.P. (collectively, “Elliott”) notified the Company that it had acquired beneficial ownership of more than 5% of BMC’s common stock and would soon be filing a Schedule 13D with the Securities and Exchange Commission.  Elliott has also notified the Company of its intent to nominate a slate of five nominees to stand for election at the Company’s 2012 Annual Meeting of Stockholders. Elliott has informed the Company that the nomination of its slate is in connection with its proposal that the Board form a special committee to pursue a sale of the Company.

The Company said that its Board has considered Elliott’s proposal that the Board form a special committee to pursue a sale of the Company and unanimously determined that such proposal is not in the best interests of the stockholders of the Company and that now is not the right time to pursue such a sale.

Bob Beauchamp, BMC's chairman and chief executive officer, said “As a public company, we are always open to any alternative that fully reflects the value and prospects of the Company.  We do not believe the Elliott proposal is in the best interests of our stockholders.”

BMC has a strong, independent Board of proven leaders with a range of relevant business and financial experience and expertise, all of whom are well qualified to further advance the interests of the Company’s stockholders, employees and customers.  BMC ended fiscal year 2012 on a positive note with renewed momentum in several key areas. During the quarter, BMC’s ESM business generated solid sequential growth of twenty one percent in license bookings, and the Company aggressively grew its cloud and software as a service, SaaS, businesses with a large number of new wins. Importantly, for fiscal 2012 the Company grew non-GAAP operating income by six percent, non-GAAP diluted earnings per share by nine percent, cash flow from operations by five percent and revenues by five percent.

Additionally, the Company posted the following key results for fiscal 2012 and the fourth fiscal quarter:

• In the fourth quarter, BMC’s SaaS bookings nearly tripled and its cloud-related license bookings nearly doubled on a year-over-year basis.
• The Company's overall ESM sales force capacity rose 20 percent for the year, excluding the impact from the acquisition of Numara.
• MSM total bookings rose six percent for the full fiscal year with nearly 550 new product placements to new and existing customers.
• Services revenue grew 10 percent for the fourth quarter and 21 percent for the full fiscal year.

BMC is executing on its strategic plan and is well positioned to capture the growing demand among enterprises for a comprehensive, heterogeneous and seamlessly integrated IT management platform.     

With respect to the consideration of director candidates, the Corporate Governance & Nominating Committee of BMC’s Board of Directors will follow the Company’s policies and procedures for considering director candidates recommended by stockholders and will respond in due course. 

BMC recommends that stockholders defer making any determination with respect to the proposals until they have been advised of the Board’s position.

Morgan Stanley & Co. LLC is serving as financial advisor and Wachtell, Lipton, Rosen & Katz is serving as legal counsel to the Company.

Business Runs on IT. IT Runs on BMC Software.

More than 25,000 IT organizations – from the Global 100 to the smallest businesses – in over 120 countries rely on BMC Software to manage their business services and applications across distributed, mainframe, virtual and cloud environments. With the leading Business Service Management platform, Cloud Management, and the industry’s broadest choice of IT management solutions, BMC helps customers cut costs, reduce risk and achieve business objectives. For the four fiscal quarters ended March 31, 2012, BMC revenue was approximately $2.2 billion. For more information about BMC Software (NASDAQ: BMC), please visit, www.bmc.com.

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