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Micro Focus Will Sell Off Linux Developer SUSE For $2.5B

Micro Focus, struggling after a merger with HPE software, looks to refocus its business by divesting from the German open source Linux and cloud software developer

SUSE, a pioneering Linux developer that has become an important player in many open source ecosystems, will change hands as parent company Micro Focus looks to refocus its business.

Micro Focus has agreed to sell the German software developer to Sweden-headquartered private equity firm EQT Partners for $2.54 billion—a deal that SUSE said in a blog post will allow it "to operate as a fully independent business."

The software company based in Nuremberg has bounced around a few times, starting in 2003 when it was bought by Novell as part of the networking technology developer's effort to grow into the Linux market.

[Related: Micro Focus CEO Leaves Six Months After $8.8 Billion HPE Software Deal]

The sale to EQT should close in early 2019 with approval from Micro Focus shareholders and regulators.

Micro Focus has been under financial strain following an $8.8 billion spin-merger with Hewlett Packard Enterprise's software assets that hasn't delivered the returns investors hoped for.

SUSE CEO Nils Brauckmann said in a statement there will be continuity of SUSE's leadership team, and with more investment opportunities under the private equity firm, "a sharp focus on customer and partner success."

SUSE was one of the earliest companies to bring to market the Linux operating system. In recent years it has expanded its portfolio to a broader array of software-defined infrastructure and application delivery solutions.

In early 2017, SUSE bought HPE's OpenStack and Cloud Foundry assets and became the "preferred partner" for HPE's Helion-branded OpenStack solution, expanding its profile in the private cloud arena.

The company later launched its Cloud Application Platform, a solution bundling two of the industry's hottest open source projects: Cloud Foundry Platform-as-a-Service and the Kubernetes container orchestration engine.

In 2010, Attachmate acquired Novell for $2.2 billion and set SUSE apart as an independent business unit focused on Linux. Micro Focus, based in the U.K., took control of SUSE when it merged with holding company Attachmate Group in 2014 in a $1.2 billion deal.

EQT holds a diverse investment portfolio across Europe, North America and Asia, including several technology companies.

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