Compuware Sets Spinoff Of Covisint Subsidiary

DETROIT — The Detroit software and IT services firm Covisint Corp. (Nasdaq: CPWR) has announced the distribution of the remainder of the shares of Covisint (Nasdaq: COVS) to its shareholders.

Compuware also announced the distribution of a preliminary proxy statement for its pending acquisition by the Chicago private equity fund Thoma Bravo LLC. The proxy statement is available at www.sec.gov and www.compuware.com.

The Covisint spinoff, part of the $2.5 billion Thoma Bravo deal, will see the distribution of nearly 31.4 million shares of Covisint stock on Friday, Oct. 31.

Compuware said that based on the number of Compuware shares and stock-option grants outstanding as of last week, it’s expected that Compuware shareholders will get 0.1402 shares of Covisint common stock for each share of Compuware they own.

The actual distribution ratio will be based on the actual number of shares as of Oct. 31.

Covisint was initially established by the Detroit Three automakers in 2000 as an online marketplace. Compuware acquired it in 2004. The company has since expanded into secure, online collaboration in other industries, including health care and oil and gas.

Established in 1973, Compuware has business units in mainframe test and debugging software and application performance management and monitoring software that keeps track of how well applications are running on the internet and mobile devices. The company has about 3,000 employees, down from a peak of 15,000 in 2000, during a foray into IT services surrounding Y2K bug repairs.

“Today we announce the complete spin-off of Covisint, a move we believe will provide Covisint an even greater opportunity to thrive as a fully independent company while allowing Compuware to focus exclusively on driving continued success in its core APM and mainframe businesses,” Compuware CEO Bob Paul said in a statement.

Fractional shares of Covisint common stock will not be distributed, and will instead be sold on the open market, with the net proceeds distributed pro rata in the form of cash payments to Compuware shareholders who would otherwise receive Covisint fractional shares.

Compuware said the spinoff is expected to be taxable for U.S. federal income tax purposes.

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