Rocket Software, Inc. signed a definitive agreement to acquire Application Modernization and Connectivity business of Micro Focus International Limited for $2.3 billion on November 28, 2023. Business will be acquired for an all-cash purchase price of $2.275 billion, before taxes, fees and other adjustments. Under the terms of the Agreement, the software, associated services and approximately 750 employees of the Business will be integrated into the Buyer. Rocket Software intends to fund the acquisition with a combination of new cash equity from its existing shareholders,committed debt financing,and cash from its balance sheet. The debt financing is expected to include incremental senior secured term loans and new senior secured notes. Debt financing for the transaction will be provided by RBC Capital Markets, Barclays Capital, Deutsche Bank Securities, UBS Securities, Citigroup Global Markets, HSBC Securities, Mizuho Securities, and SMBC Nikko Securities.

The Transaction is expected to close in OpenText?s fourth fiscal quarter ending June 30, 2024, subject to customary closing conditions and regulatory approvals, including the clearance and expiration of any applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Closing is not subject to any financing condition. Net proceeds from the transaction will be used to payoff remaining amounts due on Term Loan B due 2025 and reduce Acquisition Term Loan due 2030. Inclusive of expected synergies, Rocket Software expects the acquisition will be leverage neutral on a total leverage basis, but leveraging on a secured basis.

Goldman Sachs & Co. LLC is serving as sole financial advisor to OpenText and Cleary Gottlieb Steen & Hamilton LLP is acting as legal advisor to OpenText. RBC Capital Markets, LLC, Barclays Capital Inc., Deutsche Bank Securities Inc., and UBS Securities LLC are serving as financial advisors to Rocket Software. Ernst & Young LLP served as Accountant to Rocket Software. Christopher R. Elder, Matthew H. O'Brien, Andrew Struckmeyer, Dr. Martin A. Schwertmann, Vladimir Khodosh, Andrew Idrizovic, R. Lee Discher, Sophia Hudson, Julia Danforth, Alborz Tolou, Polina Liberman, Mike Carew and Deidre Kalenderian of Kirkland & Ellis LLP served as Legal Advisor to Rocket Software.