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Micro Focus to launch $2 billion credit facility on Wednesday
By Sara Rosenberg
New York, Sept. 15 – Micro Focus is scheduled to hold a bank meeting at 10 a.m. ET on Wednesday to launch a $2 billion senior secured credit facility, according to a market source.
Bank of America Merrill Lynch, HSBC Securities (USA) Inc., RBC Capital Markets, Goldman Sachs Bank USA and Credit Suisse Securities (USA) LLC are the joint lead arrangers on the deal.
The facility consists of a $150 million five-year revolver, a $1.35 billion seven-year covenant-light term loan B and a $500 million five-year covenant-light term loan C, the source said.
Amortization on the term loan B is 1% per annum and on the term loan C is 10% per annum.
Proceeds will be used to help fund Micro Focus’ merger with the Attachmate Group.
Under the agreement, Micro Focus will acquire the entire issued share capital of the Attachmate Group, in exchange for the issue of about 86.6 million ordinary shares to Attachmate’s parent company, Wizard Parent LLC.
Based on Micro Focus’ closing share price as at Sept. 12 of 842.5p, the value of the shares to be allotted to Wizard is around £729.6 million, which together with net debt of Attachmate as at July 31 of $1,165,800,000 gives an enterprise value to the transaction of $2,349,800,000 before costs.
Closing is expected on Nov. 3, subject to customary conditions, including Micro Focus shareholder approvals and regulatory approvals under the Hart-Scott-Rodino Act.
Combined revenues will be $1.4 billion and underlying adjusted EBIDA will be $500 million.
Micro Focus is a software provider with U.S. headquarters in Rockville, Md., and U.K. headquarters in Newbury, Berkshire. Attachmate, currently owned by Francisco Partners, Golden Gate Capital, Elliott Management and Thoma Bravo, is a Houston-based software holding company.
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