LSE-listed Micro Focus International has agreed to sell its SUSE business – an open-source infrastructure software provider – to a private equity fund for $2.535 billion (£1.92 billion) in a deal advised by the UK’s Arma Partners.
SUSE, which was the world’s first provider of an enterprise-grade open source Linux operating system, has been part of Micro Focus since 2014, when the FTSE 100 British company acquired The Attachmate Group for $2.35 billion.
It made sales of $320 million in the 12 months ended October 31, 2017 and has approximately 1,400 employees worldwide.
New owner Blitz 18-679 GmbH is a wholly owned subsidiary of private equity fund EQT, and will run SUSE as an independent company.
“Substantial Shareholder Value” for Micro Focus
Kevin Loosemore, Executive Chairman of Micro Focus, said: “At the time of the acquisition, the SUSE Business represented just over a fifth of the revenues of The Attachmate Group, which we acquired for $2.35 billion. We are therefore delighted that this investment has generated substantial shareholder value.”
He added: “The transaction provides the SUSE Business with a strong, long-term investor to support it in its next phase of growth.”
“A Fully Independent Business”
EQT will support SUSE’s next period of growth and innovation as an independent company both organically and through add-on acquisitions, the fund said, adding that it aims to further build SUSE’s public cloud business.
“Today is an exciting day in SUSE’s history. By partnering with EQT, we will become a fully independent business,” said Nils Brauckmann, CEO of SUSE.
He added: “The next chapter in SUSE’s development will continue, and even accelerate, the momentum generated over the last years. With EQT, we will benefit both from further investment opportunities and having the continuity of a leadership team focused on securing long-term profitable growth combined with a sharp focus on customer and partner success.”
“The current leadership team has managed SUSE through a period of significant growth and now, with continued investment in technology innovation and go to market capability, will further develop SUSE’s momentum going forward.”
The sale comes at a good time for FTSE 100 Micro Focus, which issued a major profit warning in March and saw its CEO quit, amid challenges surrounding its £6.6 billion acquisition last year of the software arm of Hewlett Packard.