OpenText Corporation is taking over British software company Micro Focus International PLC (LSE:MCRO) in an agreed deal worth £5.1bn, including debt.
Under the terms of the agreement, Micro Focus shareholders will receive 532p per share, a 98% premium to the firm’s closing price as of 24 August, giving it a market capitalisation of £1.8bn.
According to a statement from the two companies, the proposed acquisition “represents a compelling opportunity for OpenText”, expanding the Canadian software company's presence in key markets.
In addition, OpenText said it will benefit from Micro Focus' intellectual property and that combining the two companies' software portfolios will allow for innovation and product integration.
The acquisition of Micro Focus also “represents an opportunity for significant value creation”, it added, with the enlarged group expected to generate US$6.2bn in revenue annually and roughly US$2.2bn in adjusted underlying earnings (EBITDA).
Completion of the acquisition is expected in the first quarter of 2023, subject to shareholder approval.
"I am pleased to be recommending OpenText's offer to our shareholders. The premium offered demonstrates the significant progress we have made transforming the business,” said Micro Focus chairman Greg Lock.
“OpenText not only shares our values but will offer new opportunities for both our customers and employees.”