OpenText readies launch of $3.085 billion term loan B for Monday

By Sara Rosenberg

New York, Nov. 4 – OpenText Corp. is scheduled to hold a lender call at 1:30 p.m. ET on Monday to launch a $3.085 billion seven-year senior secured term loan B, according to a market source.

Barclays, BMO Capital Markets Corp., RBC Capital Markets, Citigroup Global Markets Inc., MUFG, HSBC Securities (USA) Inc., PNC Capital Markets, National Bank of Canada and CIBC are the joint bookrunners on the deal. Barclays is the administrative agent.

The term loan has 101 soft call protection for six months and a maximum total net leverage covenant of 4.5x, the source said.

Proceeds will be used with $1.5 billion of other senior secured debt to fund the acquisition of Micro Focus International for 532 pence per share, implying an enterprise value of about $6 billion inclusive of Micro Focus’ cash and debt.

The company had previously said in filings with the Securities and Exchange Commission that it had a commitment for a $2.585 billion senior secured seven-year term loan and a $2 billion bridge loan for the transaction.

Closing is expected in the first quarter of 2023, subject to Micro Focus shareholder approval, the sanction of the Scheme by the Court, and antitrust and foreign investment approvals.

OpenText is a Waterloo, Ont.-based software provider of business-to-business cloud integration services. Micro Focus is a Newbury, England-based enterprise software company.

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