U.S firm Serena Software is to be acquired by British software group Micro Focus International, in a deal worth $540 million.
Micro Focus, who has been keeping an eye on Serena software for a number of years, will buy the company on a cash and debt free basis.
Micro Focus plans to raise £150m ($216m) in a placing to finance the cash deal, with the placing set to be underwritten by Numis Securities and completed in May 2016.
Further plans include the repayment of Serena Software’s net debt of around $252m, in addition to the purchasing of equity amounting to $288m. This equity will be purchased from vendors, principally funds managed by HGGC, a US private equity firm, and a trust related to its founder.
A provider of enterprise software, Serena Software was founded in 1980 and operates in 10 countries. Headquartered in San Mateo, Califorina, the deal is expected to enhance Micro Focus’ core earnings in the year ending April 2017.
Kevin Loosemore, Executive Chairman of Micro Focus International plc commented "We have been tracking Serena for a number of years and are encouraged by the current management team’s recent management of a mature infrastructure software company in a similar way to Micro Focus.
"We are delighted at the prospect of Serena becoming part of the Micro Focus product portfolio where we believe that we will be able to further enhance its operational performance . This acquisition is wholly aligned with our strategy and further strengthens our existing customer and partner offers."
Alongside the acquisition announcement, Micro Focus also updated on trading. Stating that company performance was at the upper end of its full year revenue guidance in the nine months to January 31, the company maintained its guidance for the full year with revenues expected to decline between 2% and 4% on a constant currency basis.
