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Reportedly, private-equity firms Vista Equity Partners LLC and Thoma Bravo LLC are pondering over the buyout of Compuware Corp. (CPWR - Analyst Report). This is the second time in last 15 months that Compuware attracted attention from prospective private-equity buyers.

Although no talks between the parties have been reported, according to Bloomberg the company’s finances are being reviewed by the duo. Compuware rejected a $3.2 billion bid from activist investor Elliott Management Corp. in January last year.

Post the Elliott offer, Compuware reportedly solicited a number of other private equity funds such as Blackstone Group LP, TPG Capital LP and Golden Gate Capital for a possible buyout. However, to date, nothing concrete has materialized from these discussions.

After rejecting Elliott’s offer, Compuware announced a number of initiatives that included cost cutting, divestiture of non-core units, dividend payment and lastly the spin-off of its cloud-based division Covisint into a separate publicly traded unit — Covisint Corp. .

On May 16, 2013, Compuware declared its first dividend of 12.5 cents as part of its restructuring program. Covisint started trading as a separate company from Sep 2013. Compuware offered approximately 18% of its stake in the IPO. The company is expected to distribute its remaining shares directly to shareholders within a year of the completion of the IPO.

Earlier this year, Compuware divested three strategic business units — Changepoint, Professional Services and Uniface — which will allow management to focus better on the core business, thereby improving execution. Compuware’s restructuring plan is expected to save approximately $110.0–$120.0 million on an annual basis over the next couple of years.

We believe Compuware’s initiatives are positive for shareholders over the long term. Compuware expects APM to grow 9.0% in 2014. New program wins and introduction of new products will help Compuware to counter strong competition from the likes of BMC Software and CA Technologies (CA - Analyst Report). This also makes the company attractive to private-equity buyers.

However, overdependence on International Business Machines’ (IBM - Analyst Report) technology may rationalize growth prospects to a certain extent. Furthermore, the intensely competitive landscape remains a major headwind.

Currently, Compuware has a Zacks Rank #3 (Hold).

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