Newbury's Micro Focus International to be acquired in £5bn deal

Enterprise software giant Micro Focus International is set to be acquired by Open Text Corporation in a deal worth £5 billion.

The Newbury-headquartered firm has accepted, subject to shareholder and regulatory approval, an approach by the Canadian software firm which would see 532 pence paid for each share valuing the company at nearly £1.8 billion.

The acquisition is expected to complete during the first quarter of 2023.

Micro Focus has $4.4 billion debt on its balance sheet with OpenText funding the deal by raising $4.6 billion in new debt, $1.3 billion in cash and drawing $600 million from its existing revolving credit facility.

Read more - Newbury-based Micro Focus opens public cloud data centre

Mark J. Barrenechea, the CEO of OpenText, said: "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.

“We expect Micro Focus to be immediately accretive to our adjusted EBITDA. Micro Focus will benefit from the OpenText Business System to create stronger operations and significant cash flows, and Micro Focus customers will benefit from the OpenText Private and Public Clouds.

OpenText is the leader in a growing $92 billion Information Management market, delivering a compelling suite of hybrid solutions that help customers power and protect their critical information, enable their digital transformation and automate business workflows.

Barclays served as financial adviser to OpenText on the deal while Micro Focus was advised by Goldman Sachs and Numis.

Shares of Micro Focus soared more than 90 per cent following today’s announcement.

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