OpenText lifts term loan B to $3.59 billion, firms OID at 97

By Sara Rosenberg

New York, Nov. 16 – Open Text Corp. (OpenText) upsized its seven-year senior secured term loan B (Ba1/BBB-/BBB-) to $3.585 billion from $3.085 billion and finalized the original issue discount at 97, the tight end of the 96 to 97 talk, according to a market source.

Pricing on the term loan remained at SOFR+10 basis points CSA plus 350 bps with a 0.5% floor.

The term loan still 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 continued to be due at noon ET on Wednesday, the source added.

Proceeds will be used with 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.

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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