Micro Focus To Acquire HPE's Software Business; Transaction Valued At $8.8 Bln

(RTTNews) - Micro Focus International plc (MCFUF.PK, MCRO.L) and Hewlett Packard Enterprise (HPE) announced a definitive agreement pursuant to which Micro Focus has agreed to acquire HPE's software business segment. The transaction has been structured as a Reverse Morris Trust transaction.

HPE Software will, prior to completion, make a payment of approximately $2.5 billion to HPE, financed by newly incurred indebtedness of HPE Software. HPE shareholders will own 50.1% of the enlarged Group's fully diluted share capital upon completion. Approximately 238 million Micro Focus shares would be issued to HPE's shareholders, with a market value of approximately $6.3 billion. The $6.3 billion equity consideration and $2.5 billion debt funding implies an enterprise value for HPE Software of $8.8 billion.

Prior to completion, Micro Focus intends to undertake a return of value to its existing shareholders of approximately $400 million equivalent to $1.68 per Micro Focus share. Micro Focus has entered into commitments for a total of $5.5 billion of debt financing related to the transaction with J.P. Morgan including a revolving credit facility of $500 million.

HPE Software is a global infrastructure software provider offering a broad range of software across five product portfolio groupings: IT Operations Management, Application Delivery Management, Enterprise Security, Information Management & Governance and Big Data Analytics. Revenues in the twelve months to 30 April 2016 were $3.2 billion.