OpenText is paying 532 pence ($6.27) for each Micro Focus share, financed with $4.6 billion of new debt. $1.3 billion cash and $600 million derived from the current Revolving Credit Facility.
OpenText plans to Buy Micro Focus (IT Company UK)
OpenText is Canada’s biggest software firm, specialising in enterprise-wide information management (EIM), which helps companies to manage their content and participate in fundamental digital transformation.
90% of today’s Fortune 100 companies are OpenText customers, and the company’s network is responsible for $9 trillion in trade annually.
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Micro Focus currently provides enterprise management software to businesses that compete with OpenText. One of the biggest software firms UK, it announced annual revenue of $2.7 billion in April 2022.
It has five offices in the UK and has its headquarters in Newbury; however, it has offices in 48 countries, with an employee total of over 11,000.
The parties have announced plans for Micro Focus to be on OpenText’s operating model within six quarters after the deal’s closing, which is anticipated to happen within the first quarter of 2023.
The Competition and Markets Authority (CMA) will submit an antitrust review of the deal. CMA has been involved in antitrust investigations.
CMA was recently involved in massive tech deals like Microsoft’s plan to acquire Activision-Blizzard and had also registered an intention to examine Nvidia’s acquisition of Arm that was subsequently cancelled soon afterwards.
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The 2016 acquisition of OpenText by Documentum, another software company specialising in the enterprise content management market, caused Documentum’s cofounder John Newton to argue that the deal could stifle competition and spur innovation, which would hurt the business clients.
“We are pleased to announce our firm intention to acquire Micro Focus, and I look forward to welcoming Micro Focus customers, partners and employees to OpenText,” said OpenText CTO and CEO 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.”
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