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Founded in 1980, privately-held Serena Software is a provider of
enterprise software. It is headquartered in San Mateo,
California and operates in a further 10 countries.
Micro Focus said it had been tracking Serena Software for
several years and will buy the firm on a cash and debt free
basis. The UK firm will repay Serena Software's net debt of
about $252 million and purchase equity from the vendors,
principally funds managed by U.S. private equity firm HGGC and a
trust related to its founder, for about $288 million.
"This acquisition is wholly aligned with our strategy and
further strengthens our existing customer and partner offers,"
said Executive Chairman Kevin Loosemore.
The deal, which is expected to enhance Micro Focus' core
earnings in the year ending April 30 2017, will be in part
funded through a $216 million placing underwritten by Numis
Securities. It is expected to complete in May.
Micro Focus also updated on trading, saying it performed at the
upper end of its full year revenue guidance range in the nine
months to Jan. 31.
It has guided revenues on a constant currency basis will decline
by between 2 percent and 4 percent.
The group said it expected net debt at its April 30 year-end,
excluding the net proceeds of the placing, to be in the range of
$1.31 billion to $1.33 billion and will increase by between $335
million and $345 million immediately following completion of the
deal.
Shares in Micro Focus were trading up 0.3 percent at 1,470
pence, valuing the business at 3.2 billion pounds ($4.6
billion).
(Reporting by James Davey, Editing by Paul Sandle)
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