– Founded in 1983, Borland Software Corp (NASDAQ: BORL) (“Borland”) is a vendor of Application Lifecycle Management (“ALM”) solutions
– Borland’s solutions address the full range of ALM processes: Project & Portfolio Management, Requirements Definition & Management, Application Testing / Automated Software Quality, Model Driven Development and Software Change Management
– Borland employs approximately 760 staff
– With over 15,000 customers and one million licensed users, Micro Focus International plc (LSE: MCRO) (“Micro Focus”), a UK-based company, provides innovative software that helps companies to improve the business value of their enterprise applications
– Micro Focus’s Application Modernisation solutions are employed by more than 70 of the Fortune Global 100 companies
– Micro Focus employs approximately 750 staff
– As part of Micro Focus’s strategy to acquire into logical adjacent markets, the c. US$2 billion global Application Testing / ASQ market was viewed as particularly attractive
– The acquisition of Borland strongly complements Micro Focus’s acquisition of Compuware’s Testing and ASQ Business, which was announced on the same day
– Together, the acquisitions significantly increase Micro Focus’s addressable market and immediately provide critical mass in this growing market segment
– Market conditions make this a particularly attractive time for Micro Focus to expand its worldwide sales channels, blue chip customer base and product suite at reasonable valuation levels
– Arma Partners has a long-standing relationship with Micro Focus and has advised on two of their previous transactions and worked on the Borland transaction since discussions commenced in 2007
– Arma Partners played a critical role in orchestrating and efficiently managing the process simultaneously with the Compuware transaction to ensure synchronised announcement and maximum market impact
– Post-announcement, two rival bids emerged, which Arma Partners helped Micro Focus carefully fend off to eventually secure this strategically important asset at an attractive price (c. 1x maintenance revenue)
– The Borland and Compuware 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