Bain and Golden Gates reportedly made a bid for BMC Software, Inc. (NASDAQ:BMC) rivaling another consortium led by KKR & Co. L.P. (NYSE:KKR).

BMC Software

According to a Reuters report, a private equity group consisting of Bain Capital LLC and Golden Gate Capital Corp has reportedly emerged as the lead contender to buy the business software maker BMC Software Inc for over $6.5 billion. This group, which made a binding bid for BMC Software, Inc. (NASDAQ:BMC), offered more than a rival consortium of KKR & Co. L.P. (NYSE:KKR), TPG Capital LP and Thoma Bravo LLC.

BMC Software, Inc. (NASDAQ:BMC) is due to announce its first-quarter earnings on May 7. On expectations of a deal, BMC’s shares rallied 14. 7 percent since the beginning of the year, while NASDAQ rose only 9.5 percent. According to Thomson Reuters data, BMC currently trades at 11.5 times projected 12-month earnings, compared with 11.1 times average for its peer group.

Recently Michael Dell teamed up with private equity firm Silver Lake Partners LP to take Dell Inc private for $24.4 billion, with Silver Lake accounting for only a quarter of the equity in the deal. The deal for the Texas-based BMC Software would be one of the largest leveraged buyouts so far this year, after the Dell deal.

Interestingly in its January 29, 2013 filing with SEC, Elliott management disclosed that it has increased its stake in BMC Software to 9.6 percent, becoming the largest shareholder of the Application Software Company. Elliott tabled a bid believed to be around $2.3 billion in December in an attempt to counter a possible sale of the company to a rival. Elliott argued that BMC’s management was neglecting a huge opportunity to expand into Internet-based business software, a market dominated by the likes of salesforce.com, inc. (NYSE:CRM) Elliot holds shares in business software company Attachmate Corp, besides Golden Gate, Thomas Bravo and Francisco Partners.

Sensing opportunity in this burgeoning market, some of the world’s largest enterprise software providers such as Oracle Corporation (NASDAQ:ORCL), SAP AG (NYSE:SAP) and Microsoft Corporation (NASDAQ:MSFT), have already started investing heavily in that market.

The technology performance company Compuware, which has rejected a $2.3 billion bid from Elliott, is also exploring a sale and is in discussion with buyout firms to ascertain takeover interest, reports Reuters.

The buoyancy in debt markets have emboldened private equity to consider larger deals, which in turn call for larger equity checks and make buyout firms more open to teaming up.