OpenText Announces Pricing of Note Offering and Successful Term Loan Syndication in Micro Focus Acquisition Financing

WATERLOO, ON, November 16, 2022 /PRNewswire/ — OpenText™ (NASDAQ: OTEX), (TSX: OTEX) today announced that Open Text Corporation (the “Company” or “OpenText”) has priced an offering (the “Note Offering”) of 1 billion US dollars principal amount of 6.90% senior secured fixed rate notes due 2027 (the “Notes”) in connection with its proposed acquisition (the “Acquisition”) of Micro Focus International plc ( “Micro-Focus”).

OpenText Logo (PRNewsfoto/Open Text Corporation) (PRNewsfoto/Open Text Corporation)

OpenText further announced that it has successfully fully syndicated its first lien term loan facility due 2029 (the “Term Loan”) in the amount of US$3.585 billionwhich will bear interest at an annual rate equal to the adjusted forward SOFR plus 3.50%.

Upon the closing of the issuance of Notes and an amendment to the Term Credit Agreement, the Bridge Loan Agreement entered into in connection with the Acquisition will be terminated without being drawn, and all of the full amount announced previously US$4.585 billion the overall arrangement of the debt financing for the acquisition will be finalized.

The Note Offering is expected to close and the Term Facility Agreement is expected to be amended on December 1, 2022, subject in each case to the conditions of use. The net proceeds from the offering of notes, borrowings under the Company’s term loan and existing revolving credit facility, and cash on hand will be used to fund the acquisition.

As previously announced, Micro Focus shareholders have approved the terms of the acquisition. The acquisition is expected to close in the first calendar quarter of 2023, subject to regulatory approvals and customary closing conditions.

After taking into account the note offering and borrowings noted above, after the closing of the acquisition, the Company’s long-term debt would be approximately US$9.3 billion (composed of approximately 46% fixed rate debt and 54% variable rate debt), with a weighted average interest rate of approximately 5.88% and a weighted average maturity of approximately 6 years. As previously announced, OpenText is targeting a net leverage ratio of less than three times within eight quarters of closing the acquisition.

Further information

The Notes and the Term Loan will be secured on a first lien basis by existing wholly owned subsidiaries of OpenText organized in United States Where Canada which borrow or guarantee the obligations of OpenText under its senior credit facilities and, simultaneously or within one business day after the closing of the Acquisition, also by Open Text UK Holding Limited. The Notes and related guarantees will be secured on the same basis as the Company’s senior credit facilities.

The Securities and associated collateral will not be registered under the Securities Act of 1933, as amended (the “Securities Act”). The notes and related collateral are issued pursuant to Rule 144A and Regulation S of the Securities Act. The Securities and associated guarantees may not be offered or sold in United States or to, or on behalf of or for the benefit of U.S. Persons (as defined in Regulation S of the Securities Act), other than persons reasonably considered to be qualified institutional purchasers on the basis of the registration exemption provided by Rule 144A under the Securities Act and to certain persons in offshore transactions under Regulation S under the Securities Act. The Notes have not been and will not be qualified for sale to the public by prospectus under applicable Canadian securities laws and, accordingly, any offer and sale of the Notes in Canada will be made on a basis exempt from the prospectus requirements of such securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy, and there will be no sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration. , qualification or exemption under the securities laws of such jurisdiction.

About OpenText

OpenText, The Information Company™, empowers organizations to gain insight through market-leading information management solutions powered by OpenText Cloud Editions.

Publication on a website

This announcement and certain related materials will be available, subject to certain restrictions, on the OpenText website at https://investors.opentext.com/ no later than 12 noon (London hour) on the business day following the publication of this announcement. This announcement and certain associated materials available on the OpenText website are provided solely to comply with the requirements of the UK City Code on Takeovers and Mergers. Neither the content of any of the websites mentioned in this advertisement nor the content of any website accessible from hyperlinks in this advertisement is incorporated into, or forms part of, this advertisement.

Caution Regarding Forward-Looking Statements

Certain statements contained in this announcement, including statements regarding the completion and timing of the closing of the note offering, the completion and timing of the amendment to the term credit agreement, including the completion of certain conditions prior to borrowing under the term loan, statements regarding OpenText’s targeted net leverage ratio and its timing, OpenText’s plans, objectives, expectations and intentions with respect to the acquisition, expected contribution from the acquisition to the results of OpenText, the financing and closing of the acquisition, as well as the timing and expected benefits of the acquisition, the impact on future financial performance, including with respect to revenues annual recurring, cloud growth, adjusted EBITDA, cash flow and earnings, may contain words that are deemed to be forward-looking statements or information under applicable laws on applicable securities. These statements are based on OpenText’s current expectations, estimates, forecasts and projections regarding the operating environment, economies and markets in which OpenText operates, and the impact of the ongoing COVID-19 pandemic. These statements are subject to important assumptions, risks and uncertainties that are difficult to predict, and actual results may differ materially. OpenText’s assumptions, although believed to be reasonable by OpenText as of the date of this announcement, may prove to be inaccurate and, accordingly, its actual results could differ materially from the expectations set forth herein. For more information about the risks and other factors that may arise, see OpenText’s annual report on Form 10-K, quarterly reports on Form 10-Q, and other filings with the Securities and Exchange Commission and other securities regulators. Except as otherwise required by applicable securities laws, OpenText disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Copyright © 2022 OpenText. All rights reserved. Trademarks owned by OpenText. One or more patents may cover this product(s). For more information, please visit https://www.opentext.com/patents.

OTEX-MNA

For more information, please contact:

Harry E. Blount
Senior Vice President, Investor Relations
Open Text Corporation
415-963-0825
[email protected]

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SOURCEOpen Text Corporation

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