OpenText to Divest Utility Modernization and Connectivity (AMC) Enterprise to Rocket Software program for $2.275B

OpenText to Concentrate on Cloud and AI Alternative Inside Info Administration

WATERLOO, ON, Nov. 28, 2023 /PRNewswire/ — Open Textual content Company (NASDAQ: OTEX), (TSX: OTEX), at this time introduced that it has reached a definitive settlement to divest its AMC enterprise to Rocket Software program, Inc., a Bain Capital portfolio firm (“Rocket Software program”), for US$2.275 billion in money. OpenText’s AMC enterprise gives market main mainframe modernization and connectivity software program to greater than 10,000 prospects enabling them to run mission-critical enterprise purposes in hybrid cloud environments. Advantages of the transaction embody:

  • Reinforces and expands OpenText’s give attention to Cloud and AI
  • Leads to extra predictable progress
  • Will increase give attention to cloud progress alternatives
  • Accelerates de-leverage plan, count on to be beneath 3x Consolidated Web Leverage Ratio(1) inside 90 days of closing 
  • Returns OpenText to capital flexibility, together with potential future share buybacks

The expansion prospects for Info Administration have by no means been higher. We’re divesting our mainframe enterprise so we are able to singularly give attention to the highly effective Cloud and AI alternatives inside Info Administration. This divestiture will higher place us to maneuver with extra velocity in increased natural progress areas corresponding to Cloud capabilities and AI, strengthens our steadiness sheet to realize our deleveraging targets forward of schedule and returns the corporate to capital flexibility. This divestiture helps our give attention to creating worth for our shareholders.” 


                                                                                                                         Mark J. Barrenechea, OpenText CEO & CTO

Concerning the Transaction:

  • $2.275B all-cash buy value earlier than taxes and charges
  • Sale value of 4.6x AMC’s F’23 income of roughly $500M(2)
  • Sale value of 8.3x AMC’s F’23 Adjusted EBITDA of roughly $275M(2)
  • Web proceeds to cut back debt, to be utilized to the Acquisition Time period Mortgage and Time period Mortgage B
  • Count on to shut in OpenText’s fourth fiscal quarter ending June 30, 2024, topic to regulatory approvals and customary closing circumstances

The mixture of AMC and Rocket Software program’s extremely complementary product portfolios will create one of many world’s largest IT and mainframe modernization and connectivity software program corporations. Beneath the phrases of the settlement, the software program, related providers, and roughly 750 staff of AMC shall be built-in into Rocket Software program.

Till closing, OpenText and Rocket Software program will proceed to constructively collaborate to guard buyer investments and broaden choices for joint prospects.

Goldman Sachs & Co. LLC is serving as sole monetary advisor to OpenText and Cleary Gottlieb Steen & Hamilton LLP is appearing as authorized advisor to OpenText.

Convention Name Info

The general public is invited to hearken to the OpenText convention name at this time at 5:00 p.m. ET (2:00 p.m. PT). For immediate entry to the convention name use: Name Me Hyperlink. Alternatively, dial one of many following numbers to affix the queue to talk with an operator: 1-800-319-4610 (toll-free) or +1-604-638-5340 (worldwide). Please dial-in quarter-hour forward of time to make sure correct connection. Alternatively, a stay webcast of the convention name shall be obtainable on the Investor Relations part of the Firm’s web site at http://buyers.opentext.com/investor-events-and-presentations.

A replay of the decision shall be obtainable starting November 28, 2023 at 6:30 p.m. ET by way of 11:59 p.m. on December 12, 2023 and might be accessed by dialing 1-855-669-9658 (toll-free) or +1-604-674-8052 (worldwide) and utilizing passcode 0572 adopted by the quantity signal.

Extra info might be present in our presentation at https://buyers.opentext.com.  

About OpenText

OpenText, The Info Firm™, allows organizations to realize perception by way of market main info administration options, powered by OpenText Cloud Editions. For extra details about OpenText (NASDAQ: OTEX, TSX: OTEX) go to opentext.com.

Cautionary Assertion Concerning Ahead-Trying Statements

Sure statements on this press launch, together with statements about Open Textual content Company (“OpenText” or “the Firm”) concerning the market measurement of its enterprise and advantages to prospects thereof; particulars of the transaction together with timing thereof; the advantages of the transaction, together with reinforcing and increasing OpenText’s give attention to Cloud and AI, ensuing predictable progress, growing give attention to Cloud progress alternatives, strengthening of steadiness sheet, accelerated deleverage plan and elevated future capital flexibility, together with potential future share buybacks; progress prospects of Info Administration; cloud and ARR progress; creating worth for shareholders; use of proceeds from the transaction; the complementary nature of the companies; intention to collaborate to guard buyer investments and broaden choices; projected monetary info and different issues, which can include phrases corresponding to “anticipates”, “expects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “might”, “may”, “would”, “would possibly”, “will” and variations of those phrases or related expressions are supposed to determine forward-looking statements or info beneath relevant securities legal guidelines (forward-looking statements). As well as, any statements or info that discuss with expectations, beliefs, plans, projections, goals, efficiency or different characterizations of future occasions or circumstances, together with any underlying assumptions, are forward-looking statements, and are primarily based on our present expectations, forecasts and projections in regards to the working surroundings, economies and markets through which we function. Ahead-looking statements replicate our present estimates, beliefs and assumptions, that are primarily based on administration’s notion of historic developments, present circumstances and anticipated future developments, in addition to different components it believes are applicable within the circumstances, corresponding to sure assumptions in regards to the financial system, in addition to market, monetary and operational assumptions. Administration’s estimates, beliefs and assumptions are inherently topic to vital enterprise, financial, aggressive and different uncertainties and contingencies concerning future occasions and, as such, are topic to alter. We can provide no assurance that such estimates, beliefs and assumptions will show to be right. Future share buybacks are additionally topic to the ultimate willpower and discretion of the Board of Administrators, in addition to regulatory approvals. Ahead-looking statements contain recognized and unknown dangers and uncertainties corresponding to these regarding: receipt of regulatory approvals and achievement of customary closing circumstances for the transaction; all statements concerning the anticipated future monetary place, outcomes of operations, money flows, dividends, future share buybacks, financing plans, enterprise technique, budgets, capital expenditures, aggressive positions, progress alternatives, plans and goals of administration, together with any anticipated synergy advantages; our capacity to efficiently divest the enterprise and full the transaction, together with incurring unanticipated prices, delays or difficulties; and our capacity to develop, shield and keep our mental property and proprietary know-how and to function with out infringing on the proprietary rights of others. We depend on a mixture of copyright, patent, trademark and commerce secret legal guidelines, non-disclosure agreements and different contractual provisions to ascertain and keep our proprietary rights, that are vital to our success. Infrequently, we may implement our mental property rights by way of litigation in step with our strategic and enterprise goals. The precise outcomes that OpenText achieves might differ materially from any forward-looking statements. For added info with respect to dangers and different components which may happen, see the Firm’s Annual Report on Kind 10-Ok, Quarterly Stories on Kind 10-Q and different securities filings with the Securities and Change Fee (SEC) and different securities regulators. Readers are cautioned to not place undue reliance upon any such forward-looking statements, which communicate solely as of the date made. Except in any other case required by relevant securities legal guidelines, the Firm disclaims any intention or obligation to replace or revise any forward-looking statements, whether or not because of new info, future occasions or in any other case. Additional, readers ought to be aware that we might announce info utilizing our web site, press releases, securities legislation filings, public convention calls, webcasts and the social media channels recognized on the Buyers part of our web site (https://buyers.opentext.com). Such social media channels might embody the Firm’s or our CEO’s weblog, X, previously referred to as Twitter, account or LinkedIn account. The data posted by way of such channels could also be materials. Accordingly, readers ought to monitor such channels along with our different types of communication.

Non-GAAP Monetary Measures

This press launch contains sure non-GAAP measures. Please discuss with the Firm’s “Reconciliation of chosen GAAP-based measures to Non-GAAP-based measures” included throughout the Firm’s present and historic filings on Kinds 10-Ok, 10-Q and 8-Ok for extra info on the usage of non-GAAP measures by the Firm.

Notice: All greenback quantities on this press launch are in US {dollars} except in any other case indicated.
(1)  Consolidated Web Leverage Ratio (proforma) is calculated utilizing financial institution covenant methodology.
(2)  Quantities signify estimated AMC’s unaudited historic professional forma revenues and adjusted EBITDA for OpenText’s Fiscal 2023 interval ended June 30, 2023. For the interval of July 1, 2022 to January 31, 2023 the unaudited historic professional forma outcomes are offered beneath Worldwide Monetary Reporting Requirements (IFRS) and the outcomes for the interval of February 1, 2023 to June 30, 2023 are offered in accordance with United States usually accepted accounting ideas (U.S. GAAP). The estimated unaudited historic professional forma revenues and adjusted EBITDA quantities don’t embody changes to transform IFRS outcomes from the interval of July 1, 2022 to January 31, 2023 to U.S. GAAP.

OTEX-MNA

Copyright ©2023 Open Textual content. OpenText is a trademark or registered trademark of Open Textual content. The listing of emblems will not be exhaustive of different emblems. Registered emblems, product names, firm names, manufacturers and repair names talked about herein are property of Open Textual content. All rights reserved. For extra info go to: http://www.opentext.com/who-we-are/copyright-information.

SOURCE Open Textual content Company

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