The Waterloo, Ontario-based company is offering 532 pence per Micro Focus share, a 99 per cent premium to Thursday’s closing price. Open Text said it will fund the cash takeover bid with US$4.6 billion in new debt, US$600 million from an existing credit line and cash on its balance sheet.Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc.
The Newbury, U.K.-based company sells enterprise software to thousands of organizations including Airbus SE, Hewlett Packard Enterprise Co. and Kellogg Co., according to its website. Its products help companies with cybersecurity, IT operations management, communications and messaging. Micro Focus says it does business with a majority of the Fortune Global 500.Article content
But the company has seen declines in its revenue and adjusted earnings before interest, taxes, depreciation and amortization every fiscal year since 2018. Under chief executive Mark Barrenechea, Open Text has made a series of deals to bolster its software portfolio in recent years, including email encryption company Zix Corp. and cybersecurity firm Carbonite Inc. The Micro Focus acquisition is notable for its relative size: it’s worth nearly half of Open Text’s current enterprise value of US$12.8 billion, according to data compiled by Bloomberg.
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