The foremost computer technology corporation in Michigan, Compuware, has just announced that it will sell three of its business units to a private equity fund based in Los Angeles. According to a Compuware executive, the jobs held by employees of those business units are expected to remain in Detroit, where the company’s world headquarters is located. That’s good news after the 160 positions that were eliminated last year.
There have been a good many changes in the company in recent years, including the retirement of its last-surviving founder. Its current chief executive officer says that this sale of business units is just one more step in Compuware’s “ongoing reorganization plan,” and that it will allow these businesses to “flourish.” However, Compuware has reportedly received offers to sell the entire company. Some business analysts say that it could end up being sold to a private equity business or hedge fund located in another state. Its board has already rejected a takeover bid by a hedge fund in New York, which it reportedly found too low.
The three “non-core business units” being sold account for almost a quarter of the company’s profits. Of their 1,250 employees, about half are based in the company’s high-rise, downtown Detroit headquarters. Reportedly “activist shareholders” are behind the sale, which is valued at $160 million, and as well as last year’s changes in the board membership. Those changes brought in four people from outside Michigan.
Even if the entirety of Compuware is sold to a private equity fund or hedge fund, the new owners may well choose to keep the Detroit home base that the company has had for more than 40 years. Nonetheless, Detroit business and community leaders are certainly watching all of the changes with interest, as are the many Detroit residents employed there.
Source: Detroit Free Press, “Compuware to sell 3 business units” J.C. Reindl, Jan. 08, 2014