Advised Micro Focus on its acquisition of Compuware’s Automated Software Quality business
Arma Partners is pleased to announce that it acted as exclusive financial advisor to Micro Focus International plc (LSE: MCRO.L), in relation to the following strategic acquisitions announced on 6 May 2009.
The recommended $75 million cash offer to acquire Borland Software Corporation (NASDAQ: BORL), a leading independent player in the Application Lifecycle Management (ALM) market with a range of software solutions to enhance the management of application delivery. The offer price of $1.00 per share represents a premium of 25% to the prior day closing price of $0.80 and a premium of approximately 67% over the average thirty trading day closing price of $0.60.
The $80 million acquisition of the Application Testing / Automated Software Quality (ASQ) Business of Compuware Corporation (NASDAQ: CPWR). Compuware’s Testing and ASQ Business automates quality processes within the software development function to control, measure and manage the delivery of results and to ensure process consistency and continuous improvement through sophisticated workflow capabilities.
Micro Focus, a member of the FTSE 250, is a provider of innovative software that allows companies to dramatically improve the business value of their enterprise applications. Borland and the Compuware Testing and ASQ Business are complementary to each other and to the Micro Focus core business. Acquiring Borland and the Compuware Testing and ASQ Business will give Micro Focus a leading market position in the Application Testing / ASQ market, which is estimated to be worth c. $2 billion a year and is logically adjacent to Micro Focus’s core application management and modernisation business. The move into the ASQ market is consistent with Micro Focus’s stated strategy of extending in logically adjacent segments to expand its addressable market. Both acquisitions are fully financed and are being funded from existing Micro Focus cash resources supplemented by a new three year revolving credit facility of $175 million provided through a syndicated loan consortium comprising Barclays, HSBC, Lloyds and RBS.
Both transactions were well received by the markets and at close of business on the day of announcement Micro Focus’s share price had increased by c. 18%, representing an increase in market value of c. $190m.
These are the third and fourth transactions on which Arma has worked with Micro Focus over the last twelve months, having also acted as exclusive financial advisor on their acquisition of Relativity Technologies, Inc. in December 2008 and their $73m acquisition of NetManage, Inc. (NASDAQ: NETM) in May 2008.