Combined Entity Will Offer the Most Compelling
Portfolio of Solutions to Support the World's Largest Companies in
their Modernization and Hybrid Cloud Journeys
Rocket Software, Inc. (“Rocket Software”), a global technology
leader driving modernization for the world’s largest companies,
today announced it has signed a definitive agreement to acquire the
Application Modernization and Connectivity business (AMC) of
OpenText (NASDAQ: OTEX), (TSX: OTEX), which was formerly part of
Micro Focus. The total purchase price is $2.275B.
For decades, Rocket Software has been the partner solving
complex IT challenges for the largest and most innovative
organizations, across infrastructure, data, and applications.
Rocket Software’s hybrid cloud strategy empowers customers to
optimize their application portfolio wherever they are in their
modernization journey, enabling them to bridge the gap to modern
use cases without disrupting their mission-critical operations.
This approach allows organizations to benefit from the mainframe's
security and dependability while also taking advantage of powerful
analytics tools in the cloud.
AMC has been a leader in application modernization for many
years, providing industry-leading tools including COBOL and host
connectivity. These tools enable organizations to leverage their
core applications and offer flexibility for modernization, allowing
them to run applications wherever they choose. With AMC, Rocket
Software will have a more diverse modernization portfolio that
aligns with customer demands, whether on-premises or through a
hybrid cloud strategy.
Rocket Software's acquisition of AMC
achieves five key strategic objectives, including:
- Meeting organizations at any stage of their modernization
journeys with a comprehensive product portfolio addressing all use
cases, spanning from mainframe to hybrid workloads.
- Enabling customers to derive value from their decades of
investment in the core applications that run their business while
also innovating and taking full advantage of new applications and
technologies.
- Solidifying Rocket Software as a leader in hybrid cloud,
deepening current customer relationships and ensuring sustainable
growth in the legacy enterprise IT market. The company is
positioned not only to address immediate customer needs but also to
guide customers through their modernization journey over time.
- Extending and complementing Rocket Software’s industry-leading
R&D expertise, fostering continuous innovation through the
application of emerging technologies like generative AI.
- Further strengthening Rocket Software's position as the partner
of choice to meet industry and customer needs and deliver superior
customer success.
“We are proud to be the preferred partner dedicated to meeting
our customers at any point in their modernization journeys and
minimizing unnecessary risk to their business operations,” said
Milan Shetti, Rocket Software President and CEO. “For the many
enterprise organizations who are built on the mainframe and ready
to unlock opportunity using hybrid cloud, reality calls for a
continuum with solutions and expertise that span both worlds.
Welcoming the AMC business and its talented team to Rocket Software
marks an extraordinary moment for the company, the market, and the
thousands of organizations who share in our vision of making the
best-of-both-worlds a reality.”
By combining Rocket Software’s industry-leading customer service
with more resources to innovate, the company will be uniquely
positioned in the market to not only meet customers’ immediate
needs but also to help them transform over time. These deep
customer relationships will strengthen retention, broaden
cross-sell opportunities, and drive sustainable growth for the
business.
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. Inclusive of expected
synergies, the company expects the acquisition will be leverage
neutral on a total leverage basis, but leveraging on a secured
basis.
The deal is expected to close in Q2 2024 ending June 30, 2024,
subject to receipt of applicable regulatory approvals and other
customary closing conditions.
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
Accounting Advisor to Rocket Software. Kirkland & Ellis LLP
served as Legal Advisor to Rocket Software. 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.
About Rocket Software
Rocket Software partners with the largest enterprises, in all
industries, to solve their most complex IT challenges, across
infrastructure, data, and applications — with solutions that
simplify, not disrupt their modernization journey. Trusted by over
10,000 customers, Rocket Software helps enterprises modernize in
place with a hybrid cloud strategy, so they don’t need to
re-platform or build from the ground up. The company’s 2,300 global
employees work with customers to accelerate and optimize their
modernization journey while meeting evolving market needs. Rocket
Software is a privately held U.S. corporation headquartered in the
Boston area with centers of excellence strategically located
throughout North America, Europe, Asia and Australia. Rocket
Software is a portfolio company of Bain Capital Private Equity.
Follow Rocket Software on LinkedIn and Twitter or visit
www.RocketSoftware.com.
Cautionary Information Regarding Forward-Looking
Statements
Some of the statements contained in this press release are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, as amended, including,
but not limited to, statements about the overall performance of the
AMC business and the expected synergies from the acquisition and
statements about the expected financing and closing date of the
acquisition, including obtention of regulatory approvals and
satisfaction of other customary closing conditions. These
forward-looking statements are generally identified by the use of
words such as “anticipate,” “believe,” “could,” “estimate,”
“expect,” “intend,” “may,” “plan,” “potential,” “predict,”
“project,” “should,” “target,” “will,” “would” and, in each case,
their negative or other various or comparable terminology. These
forward-looking statements reflect our views with respect to future
events as of the date of this press release and are based on our
current expectations, estimates, forecasts, projections,
assumptions, beliefs and information. Although management believes
that the expectations reflected in these forward-looking statements
are reasonable, it can give no assurance that these expectations
will prove to have been correct. All such forward-looking
statements are subject to risks and uncertainties, many of which
are outside of our control, and could cause future events or
results to be materially different from those stated or implied in
this press release. Such factors and risks include, but are not
limited to, risks related to the receipt of regulatory approvals
and satisfaction of the other closing conditions to close the
acquisition; our ability to successfully obtain the expected
financing for the acquisition; our ability to successfully
integrate the AMC business and realize the expected synergies; and
certain other risks. It is not possible to predict or identify all
such risks. We expressly disclaim any obligation to publicly update
or review any forward-looking statements, whether as a result of
new information, future developments or otherwise, except as
required by applicable law.
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Media: V2 Communications for Rocket Software
rocket@v2comms.com
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