25 Aug 2022
Opentext buys UK-based Micro Focus for $7.85 billion
On August 25, 2022, OpenText has agreed to acquire the entire issued share capital of Micro Focus for 532 pence per share, valuing the deal at approximately $7.85 billion (US$6.0 billion). Micro Focus is one of the world's largest software firms, with a trailing twelve months (TTM) revenue of around $3.7 billion (US$2.7 billion) as of April 30, 2022. OpenText CEO, Mark J. Barrenechea, expressed enthusiasm for the acquisition, emphasizing that it will position OpenText as a leading software and cloud business with a robust customer base. The acquisition aims to enhance OpenText's revenue and operational scale, targeting a total addressable market (TAM) of $232.92 billion (US$170 billion). Funding for the all-cash acquisition will come from $6.3 billion (US$4.6 billion) in new debt, $1.78 billion (US$1.3 billion) in cash, and a $822 million (US$600) million draw from OpenText's existing revolving credit facility. The transaction is expected to close in Q1 2023, subject to approvals and conditions.
Barclays Bank PLC, BMO Capital Markets Corp., Royal Bank of Canada, and Citigroup Global Markets Inc. are arranging financing for OpenText. Legal advisors for the deal include Allen & Overy LLP and Cleary Gottlieb Steen & Hamilton LLP for OpenText.
