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Micro Focus International to sell SUSE
Posted on Wednesday, 04 July 2018 09:54
Global software business Micro Focus has announced a definitive agreement to sell its company SUSE to Blitz 18-679, a newly formed subsidiary of EQT Partners’ EQTVIII (EQT), for USD 2.53 billion.
Micro Focus agreed to a deal after the EQT fund valuation for the target represented 7.9 times revenue and 26.7 times adjusted operating profit for the year ending 31st October 2018.
Interest in the company was initiated after a drop in share value following a trading update, which prompted financial sponsors to enquire about a possible sale.
The target, formed in 1992 and headquartered in Germany, specialises in enterprise-grade Linux software and products.
SUSE previously achieved a revenue of USD 303.00 million and an adjusted operating profit of USD 98.70 million in the year ending 30th April 2017.
With operations in 40 countries globally, including the US and China, the company had gross assets of USD 797.70 million as of 30th April 2018.
The deal is on a cash and debt free basis, but remains subject to normalisation of working capital.
Kevin Loosemore, executive chairman of the target said: “The transaction delivers compelling value for Micro Focus and provides the SUSE business with a strong, long-term investor to support it in its next phase of growth.”
Micro Focus’s debt will be repaid using the proceeds of the sale, with the remainder to be used for corporate matters or returned to shareholders.
The transaction is also subject to the implementation of the separation pursuant to an agreed plan of dividing the assets, alongside government and shareholder approval.
Micro Focus’ sale is expected to complete in the first quarter of 2019.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 2,052 deals targeting software publishers announced worldwide since the beginning of 2018.
The largest of these is worth USD 5.40 billion and took the form of an acquisition of financial and healthcare services software developer DST Systems by SS&C Technologies Holdings.
© Zephus Ltd