Canadian software company OpenText, said on Thursday it would acquire Britian’s Micro Focus International in a deal valued at $6 billion, including debt, in a push to expand its enterprise information management business.
In a push to expand its enterprise information management business, OpenText said on Thursday it would pay 532 pence ($6.30) in cash for each Micro Focus share, a 98.7% premium over Micro Focus’s closing price on Thursday, giving the company a market capitalization of about $2 billion.
Micro Focus’ shares soared to a more than one-year high of 518 pence in early trade. The UK company said it considered the terms of the deal to be “fair and reasonable” and would recommend shareholders vote in favour of the acquisition, according to the joint statement on Thursday.
Micro Focus, based in Newbury, Berkshire, has $4.4 billion debt on its balance sheet, according to its latest earnings report.
OpenText will fund 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.
During a call with analysts, OpenText Chief Executive Mark Barrenechea said the company can stabilize Micro Focus’ business and accelerate its cloud transition.
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