The deal, expecting to close in the first quarter of 2023, will be funded with $4.6bn in new debt, $1.3bn in cash, and drawing $600m from its existing revolving credit facility
Canadian software firm OpenText has announced that its wholly-owned subsidiary OpenText UK Holding has agreed to acquire British multinational software and information technology Micro Focus in a deal worth around $6bn.
As agreed, OpenText will pay $6.29 (532 pence) in cash for each Micro Focus share.
OpenText will fund the transaction with $4.6bn in new debt, $1.3bn in cash, and drawing $600m from its existing revolving credit facility.
OpenText CEO and CTO Mark J. Barrenechea. “Upon completion of the acquisition, OpenText will be one of the world’s largest software and cloud businesses with a tremendous marquee customer base, global scale and comprehensive go-to-market.
“Customers of OpenText and Micro Focus will benefit from a partner that can even more effectively help them accelerate their digital transformation efforts by unlocking the full value of their information assets and core systems.
“Micro Focus brings meaningful revenue and operating scale to OpenText, with a combined total addressable market (TAM) of $170bn. With this scale, we believe we have significant growth opportunities and ability to create upper quartile adjusted EBITDA and free cash flows.”
Based in Newbury, Berkshire, Micro Focus is one of the largest enterprise software providers in the world. It counts thousands of organisations globally as its clients.
The company, listed on the London Stock Exchange, had approximately $2.7bn pro forma trailing twelve months (TTM) revenue for the period ended 30 April 2022.
The acquisition is expected to close in the first quarter of 2023, subject to approvals from Micro Focus shareholders and other clearances.