OpenText Buys Micro Focus

OpenText announced that it has closed the previously announced acquisition (the “Acquisition”) of Micro Focus International plc (“Micro Focus”), a leading provider of mission-critical software technology and services that help customers accelerate digital transformation.

“I would like to welcome Micro Focus customers, partners and employees to OpenText,” said OpenText CEO & CTO Mark J. Barrenechea. “Digital life is life, and with Micro Focus’ great products and talent, we will help organizations of all sizes accelerate their digital transformation.”

Barrenechea further added, “With this acquisition, OpenText’s corporate mission expands to help enterprise professionals secure their operations, gain more insight into their information, and better manage an increasingly hybrid and complex digital fabric with a new generation of tools that include Cybersecurity, Digital Operations Management, Applications Modernization & Delivery and AI & Analytics. This new generation of Information Management software will help organizations accelerate their digital transformation and drive growth while reducing costs.”

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Preliminary Financial Overview

Further information on our financial performance, as well as updated models, will be provided when OpenText reports its second quarter Fiscal 2023 financial & business results on February 2, 2023.

Closing Terms of the Acquisition

• Total purchase price of approximately $5.8 billion, inclusive of Micro Focus’ cash and debt, subject to final adjustments
• Total purchase price is 2.3x Micro Focus’ TTM revenues⁽¹⁾
• Total purchase price is 6.7x Micro Focus’ TTM adjusted EBITDA⁽²⁾
• Immediately accretive to F’23 adjusted EBITDA dollars
• Expected to be on the OpenText operating model within 6 full quarters or sooner
• Net leverage⁽³⁾ expected to be less than 3x within 8 full quarters or sooner
• Consistent with previously announced cost synergies of $400 million, expect to balance the combined company through an approximate 8% workforce reduction due to the acquisition of Micro Focus

“We have a structured and disciplined approach to M&A. The last six months of planning has led us to a defined integration plan to deliver on our committed outcomes. We are ready and excited about winning the Information Management market, strong customer outcomes, and company growth and expanded cash flows,” concluded Barrenechea.

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