Open Text to acquire Micro Focus in all-cash US$6 billion deal

Waterloo-based information management company Open Text has announced it has reached an agreement to acquire UK software giant Micro Focus in an all-cash US$6 billion deal. 

Open Text is offering 532 pence (about US$6.30) per Micro Focus share, a 99 per cent premium over Thursday’s closing price.

Open Text said that it will fund the acquisition with US$4.6 billion in new debt, US$1.3billion in cash, and a US$600 million draw on its existing revolving credit facility.

The US$6 billion purchase price, inclusive of Micro Focus’ cash and debt ($4.4 billion debt according to its latest earnings report), is 2.2x Micro Focus’ pro forma TTM (Trailing Twelve months) revenues and 6.3x Micro Focus’ pro forma TTM adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). 

Open Text says that the acquisition is expected to generate a total of US$800 million in cost synergies, which includes Micro Focus’ US$300 million cost savings program.

The deal is expected to close in the first quarter of calendar 2023.

“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,” said OpenText chief executive officer (CEO) and chief technical officer (CTO) Mark J. Barrenechea.

Would you recommend this article?


Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.

Jim Love, Chief Content Officer, IT World Canada

Featured Download

Ashee Pamma
Ashee Pamma
Ashee is a writer for ITWC. She completed her degree in Communication and Media Studies at Carleton University in Ottawa. She hopes to become a columnist after further studies in Journalism. You can email her at [email protected]

Featured Story

How the CTO can Maintain Cloud Momentum Across the Enterprise

Embracing cloud is easy for some individuals. But embedding widespread cloud adoption at the enterprise level is...

Related Tech News

Get ITBusiness Delivered

Our experienced team of journalists brings you engaging content targeted to IT professionals and line-of-business executives delivered directly to your inbox.

Featured Tech Jobs