Micro Focus in £150m placing to part-fund Serena buy

Software product group Micro Focus said it was raising £150m in order to partially fund the acquisition of Serena Software.

Micro Focus said it would buy Serena on a cash and debt free basis for an enterprise value of $540m (£377m) in cash, to be settled through the repayment Serena's debt of around $252m (£176m) and the purchase of Serena's entire share capital for the balance of approximately $288m, subject to customary working capital and other adjustments.

The deal is being funded out of the proceeds of the placing together with the group's existing cash resources and drawdown of the group's currently undrawn existing revolving credit facility arranged through Barclays and HSBC which has been extended from $225m to $325m.

Completion of the acquisition is conditional only upon the receipt of competition clearances in the US and Germany. Subject to the closing conditions being satisfied, it is anticipated that completion will take place during May 2016.

Micro said Serena Group reported 2014 revenues of $176.2m underlying adjusted earnings before interest, tax, depreciation and amortisation of $87m and pre-tax profits of $30.3m.