LONDON: Britain’s Micro Focus Intl has agreed to sell its open-source enterprise software SUSE business to a private equity fund advised by Sweden’s EQT Partners for US$2.535 billion, lifting its shares by 6% on Monday.
Micro Focus, a serial acquirer that has been struggling to get to grips with a US$8.8 billion Hewlett Packard Enterprise deal, said it would use some of the proceeds to reduce debt and could return some of the rest to shareholders.
SUSE, a pioneer in enterprise-grade Linux software serving companies such as Air India, Daimler and Total, has been part of Micro Focus since 2014, when the British company acquired The Attachmate Group for US$2.35 billion.
At that time, SUSE represented just over a fifth of the revenue of Attachmate, Micro Focus said.
“It was clear from the outset that the SUSE Business was an outstanding business with great people, great customers and fantastic products in a vibrant and dynamic market,” Executive Chairman Kevin Loosemore said.
The FTSE 100 company, which manages older software for customers including banks and airlines, has run SUSE as a semi-independent division.
EQT Partners’ Johannes Reichel said: “We were impressed by the business’ strong performance over the last years as well as by its strong culture and heritage as a pioneer in the open source space.”
SUSE, which competes with Red Hat and Ubuntu in corporate open source software, generated revenue of $303 million and adjusted operating profit of US$98.7 million in the year to end-April 2017, Micro Focus said.
Micro Focus said it believed the price EQT fund was paying, representing a multiple of about 7.9 times revenue and 26.7 times adjusted operating profit for the year to end-October, was “highly attractive”.
Micro Focus was advised by Numis and SCA while EQT was advised by Jefferies and Arma Partners.