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Applications & OS News

OpenText To Acquire Micro Focus In Huge $6B Deal

Joseph F. Kovar

‘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,’ said OpenText CEO and CTO Mark Barrenechea.

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Information management software vendor OpenText Thursday said it plans to acquire fellow software and cybersecurity specialist Micro Focus in a deal that values the latter at about $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 annualized revenue of about $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.

[Related: THE 10 BIGGEST TECH M&A DEALS OF 2022 (SO FAR)]

Waterloo, Ontario-based OpenText reported fiscal year 2022 revenue of $3.5 billion, including cloud revenue of $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 percent of its total revenue, content services accounting for 26 percent, business networks 24 percent and security 22 percent.

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

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

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 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 $860 million deal. OpenText two years earlier acquired cloud data protection technology developer Carbonite for $1.42 billion. That deal included security vendor Webroot, which was acquired by Carbonite only a couple months before Carbonite was acquired by OpenText.

Joseph F. Kovar

Joseph F. Kovar is a senior editor and reporter for the storage and the non-tech-focused channel beats for CRN. He keeps readers abreast of the latest issues related to such areas as data life-cycle, business continuity and disaster recovery, and data centers, along with related services and software, while highlighting some of the key trends that impact the IT channel overall. He can be reached at jkovar@thechannelcompany.com.

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