Advised Micro Focus on its acquisition of NetManage, a provider of software for transforming legacy applications into new web-based solutions
May 2008
  • Sector: Infrastructure Software & Cybersecurity
  • Deal Type: Strategic Deals; Public Deals
  • Engagement type: Buyside
  • Size: <$200m

We are pleased to announce that Arma Partners has acted as exclusive financial advisor to Micro Focus International plc (LSE: MCRO.L) on its recommended cash offer of $7.20 per share, or approximately $73 million for the entire issued and to be issued share capital of NetManage, Inc. (NASDAQ: NETM). The price represents a 73% premium to NetManage’s share price at close of business on the previous day.

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. NetManage provides software technologies to transform core legacy applications into new Web-based business solutions.

Combining the businesses of Micro Focus and NetManage will further strengthen Micro Focus’s position as a leading player in the fast growing, highly fragmented Application Modernisation market and will be earnings enhancing in Micro Focus’s fiscal year ending 30 April 2009 (before amortisation of intangible assets and one-off integration and restructuring costs). The Offer is subject to approval by NetManage’s shareholders and customary closing conditions and is expected to close in June 2008.

– NetManage, Inc. (NASDAQ: NETM) (“NetManage”) is a software company that provides the fastest way to transform legacy applications into new Web-based business solutions

– The company’s products allow customers to access and leverage applications and data on a number of platforms including IBM-compatible mainframe computers, SAP, Oracle, UNIX, and Microsoft-based servers

– NetManage employs 215 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 550 staff

– NetManage will enhance Micro Focus’s product portfolio and increase its footprint in the highly fragmented application modernisation market by providing additional scale for its development tools business

– The transaction will add incremental geographical presence in the important US market while also providing a platform to drive further European adoption of NetManage’s solution offering

– The acquisition is also earnings enhancing due to synergies from cost rationalisation, listing and compliance costs and back office overheads

– Arma Partners has a long-standing relationship with Micro Focus and was retained on this buy-side engagement after consistent positive contributions during strategic target search activities

– Arma Partners’ careful and balanced negotiation, bidding and timely responses were critical to secure the NetManage transaction at an attractive price on the back of a failed bid by Rocket Software

– The transaction has been widely applauded by industry observers as Micro Focus’s management has demonstrated its ability to pursue accretive acquisitions and deliver strong growth and profitability in a difficult market environment – the stock price has increased by c. 50% over six months since this acquisition