Private equity firm KKR has begun exploring a sale of BMC Helix, the information services unit focused on IT service and operations, according to people familiar with the situation. The sources said the process could value Helix at as much as $1.5 billion.
Advisory duties on the potential sale have been handled by Jefferies, the sources said, and the business has already drawn initial bids from both other private equity firms and corporate buyers. Those individuals spoke on condition of anonymity because the discussions are private. KKR and Jefferies declined to comment, and BMC Helix did not respond to a request for comment.
BMC Helix provides an AI-driven IT service management platform designed to automate enterprise service desks, manage incidents and assets, and monitor hybrid IT environments. The platform competes with other IT service management providers, including ServiceNow.
According to the people familiar with the matter, the Helix business generates approximately $150 million in earnings before interest, taxes, depreciation and amortization (EBITDA) and about $750 million in annual recurring revenue (ARR). Based on those figures, the sale could imply a valuation in the range of 8 to 10 times its core profit, reaching up to $1.5 billion, the sources said.
The potential divestiture follows KKR's 2025 decision to spin the Helix product into a standalone company with a focus on IT service and operations. The prior parent company, BMC Software, has maintained its emphasis on mainframe automation and its broader software business.
Sources also indicated that KKR plans to begin groundwork for an initial public offering for BMC as early as 2026, contingent on the completion of the Helix sale. The timing and execution of any IPO would follow the outcome of the divestiture process.
The contemplated sale arrives at a time when software valuations have softened. Public market investors have, in recent weeks, expressed concerns that developments in artificial intelligence could disrupt established software business models. That unease has contributed to a pullback in software stocks and has dampened some merger-and-acquisition and initial public offering activity.
Summary
KKR is marketing BMC Helix with Jefferies advising and has received initial bids. The asset reports roughly $150 million in EBITDA and $750 million in ARR, supporting a potential valuation of 8 to 10 times core profit - up to $1.5 billion. The sale follows a 2025 spin-off and precedes planned IPO groundwork for BMC as early as 2026. The process unfolds amid investor concerns that AI could unsettle software valuations and slow dealmaking.
Key points
- BMC Helix is being shopped with Jefferies advising and has attracted initial interest from private equity and corporate bidders.
- The unit reports about $150 million in EBITDA and $750 million in ARR, implying a potential valuation of 8 to 10 times core profit.
- KKR's intended sale could clear the way for IPO groundwork on BMC as early as 2026, though the IPO timeline depends on completing the Helix divestiture.
Risks and uncertainties
- Market sentiment toward software is uncertain - investor concerns about AI disruption have recently pressured valuations and slowed M&A and IPO activity.
- Outcomes of the sale process are uncertain - initial bids have been received, but no commitment or agreed price has been disclosed.
- Any IPO plans for BMC are contingent on the sale of Helix and broader market conditions, which have been soft in the software sector.
The foregoing reflects the information provided by sources familiar with the matter. No additional details about bidders, deal timing, or definitive transaction terms have been disclosed.