Travers Smith has advised its long-standing client Micro Focus International plc ("Micro Focus"), the global enterprise software company, on its proposed $US 8.8 billion merger with Hewlett Packard Enterprise's ("HPE") software business segment ("HPE Software").
The merger constitutes a reverse takeover for the purposes of the UKLA's Listing Rules and is subject to customary closing conditions, including, amongst other things, the carve out of the HPE Software business from HPE, regulatory approvals and Micro Focus shareholder approval. The merger will create one of the world's largest pure-play infrastructure software companies, with combined annual revenues of $US 4.5 billion and combined EBITDA of $US 1.35 billion.
A member of the FTSE 100, Micro Focus is a global enterprise software company supporting the technology needs and challenges of the Forbes Global 2,000 (the top 2,000 public companies in the world as determined by Forbes magazine). Micro Focus' solutions help organisations leverage existing IT investments, enterprise applications and emerging technologies to address complex, rapidly evolving business requirements while protecting corporate information at all times. Micro Focus has more than 4,500 employees, more than 5,000 partners operating across more than 30 countries and a customer base well in excess of 20,000. Principal brands of Micro Focus International are: Attachmate, Borland, Micro Focus, NetIQ, Novell and SUSE.
HPE Software is a leading global infrastructure software provider that allows customers to automate IT operations to simplify, accelerate and secure business processes. The business operates a global footprint spanning the Americas, Asia Pacific & Japan and EMEA regions, engaging with approximately 5,000 partners and over 50,000 customers across the world. HPE Software currently works with 94 of the Fortune 100 companies.
The merger of the two companies represents a rare opportunity to increase significantly Micro Focus' scale and breadth with a business operating in adjacent and complementary product areas with similar characteristics and benefitting from a high proportion of recurring revenues and strong cash conversion.
Travers Smith's team, which advised long-standing client Micro Focus on the transaction, was led by partner and head of corporate Spencer Summerfield, who was supported by corporate partner Jon Reddington, senior counsel Mohammed Senouci and senior associate Tom Coulter. Additional specialist advice was provided by partners Nigel Seay and Stephen Whitfield in competition, partner Dan Reavill and senior associate James Longster in IP & Technology, and partner Simon Yates in tax.
US advice was provided to Micro Focus by Kirkland & Ellis LLP. HPE was represented by Wachtell, Lipton, Rosen & Katz and Freshfields Bruckhaus Deringer. Other advisers on the transaction included J.P. Morgan Cazenove, Numis Securities and Goldman Sachs.
Spencer Summerfield commented: "The combination of Micro Focus and HPE Software - two market leaders in software innovation - is a significant development for Micro Focus, creating one of the world's largest infrastructure software companies with a truly global footprint. We are very pleased to have assisted Micro Focus on this landmark transaction, which marks an important milestone not only for the development of their business but the industry itself as Micro Focus seeks to drive software innovation across both traditional and emerging IT market segments."
