OpenText Acquires Dell’s Enterprise Information Management Business for $1.62 Billion

OpenText of Waterloo, Ontario, and a provider of Enterprise Information Management (EIM), reports that it’s acquired Dell EMC’s Enterprise Content Division, including Documentum, for a $1.62 billion.

“Customers are rethinking their enterprise platforms to better compete in the age of digital. EIM is the key platform to enable that transformation, and our acquisition of Documentum and the Enterprise Content Division from DELL EMC significantly strengthens our market leading position,” commented OpenText CEO  and CTO Mark J. Barrenechea. “We are pleased to welcome 5,000 marquee customers, 2,000 employees and over 300 partners to OpenText. Customers are responding very well to our Release 16 and this acquisition extends our leadership in content services, information archives, key verticals, and the Cloud.”

Financing Details

As noted, the purchase price for the acquisition was U.S. $1.62 billion. The sources of funds used were approximately U.S. $650 million of cash on hand, U.S. $585 million net proceeds from an underwritten public offering of OpenText’s common shares, U.S. $254 million net proceeds from a reopening of OpenText’s 5.875% senior notes with the remaining funds drawn under OpenText’s existing revolving credit facility.

Following the public offering of common shares in December 2016 in connection with the acquisition, OpenText had 131,500,448 common shares outstanding as at December 31, 2016, which does not yet reflect the 2-for-1 share split previously announced. OpenText’s common shares are anticipated to commence trading on a post-split basis on Wednesday, January 25, 2017.

A market and financial update will be provided during the OpenText second quarter fiscal year 2017 financial results call on February 2, 2017.