OpenText launches $3.09 billion term loan B at SOFR plus 350 bps

By Sara Rosenberg

New York, Nov. 7 – OpenText Corp. launched on Monday its $3.085 billion seven-year senior secured term loan B (Ba1/BBB-/BBB-) with price talk of SOFR+10 basis points CSA plus 350 bps with a 0.5% floor and an original issue discount of 96 to 97, according to a market source.

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

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.

Commitments are due at noon ET on Nov. 16, the source added.

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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