OpenText to acquire Micro Focus in US$6b deal

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OpenText to acquire Micro Focus in US$6b deal

Information management software vendor OpenText said it plans to acquire fellow software and cybersecurity specialist Micro Focus in a deal that values the latter at about US$6 billion.

The acquisition, should it close as expected early next year, will create one of the world’s largest information management and security businesses with a total annualised revenue of about US$6.2 billion, OpenText said.

While both companies have information management at their core, they do have some significant differences that limit the overlap between the two.

Canadian company OpenText reported fiscal year 2022 revenue of US$3.5 billion, including cloud revenue of US$1.5 billion, customer support revenue of $1.3 billion, licensing revenue of $350 million and professional services revenue of $270 million.

OpenText focuses on four key areas, with digital experience accounting for 28 per cent of its total revenue, content services accounting for 26 per cent, business networks 24 per cent and security 22 per cent.

UK-based Micro Focus meanwhile reported total annual revenue of US$2.7 billion, with maintenance accounting for US$1.7 billion, SaaS and other recurring revenue of US$136 million, consulting revenue of US$169 million and license revenue of US$656 million.

The company has seven key focus areas, with IT operations accounting for 36 per cent of total revenue, application development for 18 per cent, storage and content 16 per cent, security 14 per cent, application infrastructure 7 per cent, analytic platforms 6 per cent, and portfolio management 4 per cent.

North America is the largest market for both companies.

Together, the two companies do business with 98 of the 100 largest companies in the world, including 20 of the top 20 manufacturing, oil and gas, telecom, federal governments, financial services, retail, automotive, health care and transportation companies worldwide.

OpenText executives were not available to respond to a CRN US request for more information at press time.

OpenText CEO and CTO Mark Barrenechea, in a prepared statement, said he looks forward to bringing Micro Focus’ employees and customers to OpenText.

“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.

Customers of OpenText and Micro Focus will benefit from a partner that can even more effectively help them accelerate their digital transformation efforts by unlocking the full value of their information assets and core systems,” Barrenechea said in the statement.

Micro Focus is the latest in a string of big software acquisitions for OpenText.

The company last November unveiled a plan to acquire email encryption software developer Zix in an US$860 million deal.

OpenText two years earlier acquired cloud data protection technology developer Carbonite for US$1.42 billion.

That deal included security vendor Webroot, which was acquired by Carbonite only a couple months before Carbonite was acquired by OpenText.

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