CANADA (CU)_ A Canadian software company, has agreed to acquire British, software and information technology company Micro Focus International in a deal that included debt.
The agreement on the terms of a recommended all-cash offer was made by OpenText Corporation through its wholly-owned subsidiary Bidco, to acquire the entire issued and to be issued share capital of Micro Focus (LSE: MCRO) and (NYSE (ADS): MFGP) at a price of 532 pence per share, indicating an enterprise value of approximately $6 billion of total shares.
The world of business has seen a series of major mergers and acquisitions and major software acquisitions have been nothing new in the recent past. As of 2018, OpenText pursued the key areas of digital experience, content services, business networks and security. These accounted for 28% of its total revenue. The Newbury, U.K-based Micro Focus reported total annual revenue of $2.7 billion in 2018; maintenance made up $1.7 billion of that total, SaaS and other recurring revenue gave $136 million to this total, consulting raked in $169 million in revenue, license income added up to $656 million for the year. The company has the key focus areas: IT operations getting 36 percent of their total revenue; application development was for 18 percent; storage and content made up for 16 percent; security accounted for 14%, application infrastructure accounted for 7%, analytic platforms were 6 % of total revenue; portfolio management made up 4%t of their overall financial outlook.
OpenText CEO and CTO Mark Barrenechea said he looks forward to welcoming Micro Focus’ employees and customers to OpenText. Upon completion of the acquisition, OpenText will be one of the largest software and cloud businesses in the world, with a tremendous marquee customer base, global scale and comprehensive go-to-market. Customers of OpenText and Micro Focus can take advantage from a partner that can be even more effective in helping them accelerate their digital transformation efforts by unlocking the full value of their information assets and core systems, Barrenechea added.
