Rocket Software , Inc. (“Rocket Software”), a global technology leader driving the modernization of the world’s largest companies, announced the signing of a definitive agreement to acquire the business of Application Modernization and Connectivity (AMC) from OpenText (NASDAQ: OTEX ), (TSX: OTEX), which was formerly part of Micro Focus. The total purchase price amounts to $2,275 million.
For decades, Rocket Software was the partner that solved the complex IT challenges of the largest and most innovative organizations, across infrastructure, data and applications. Rocket Software’s hybrid cloud strategy enables customers to optimize their application portfolio wherever they are on their modernization journey, enabling them to close the gap to modern use cases without disrupting their mission-critical operations. This approach allows organizations to benefit from the security and reliability of the mainframe while taking advantage of the powerful analytical tools of the cloud.
AMC has been a leader in application modernization for many years, providing industry-leading tools including COBOL and host connectivity. These tools enable organizations to leverage their core applications and offer flexibility for modernization, allowing them to run applications wherever they choose. With AMC, Rocket Software will have a more diverse modernization portfolio that aligns with customer demands, whether on-premises or through a hybrid cloud strategy.
Also Read: Intel Granulate Optimizes Databricks’ Data Management Operations
Rocket Software’s acquisition of AMC achieves five key strategic objectives, including:
- Serve organizations at any stage of their modernization processes with a comprehensive product portfolio that addresses all use cases, from mainframe to hybrid workloads.
- It enables customers to realize value from their decades of investment in the core applications that drive their business, while innovating and taking full advantage of new applications and technologies.
- Establishes Rocket Software as a leader in hybrid cloud, deepens existing customer relationships and ensures sustainable growth in the legacy enterprise IT market. The company is positioned not only to respond to customers’ immediate needs, but also to guide them on their modernization journey over time.
- It expands and complements the R&D expertise of Rocket Software, a leader in the sector, fostering continuous innovation through the application of emerging technologies such as generative AI.
- It further strengthens Rocket Software’s position as a partner of choice to meet industry and customer needs and deliver superior customer success.
“We are proud to be the partner of choice dedicated to satisfying our customers at every point in their modernization journeys and minimizing unnecessary risk to their business operations,” said Milan Shetti, president and CEO of Rocket Software. For the many enterprise organizations that are mainframe-based and ready to take advantage of the opportunities offered by the hybrid cloud, reality demands continuity with solutions and expertise that span both worlds. “Welcoming the AMC business and its talented team to Rocket Software marks an extraordinary moment for the company, the market and the thousands of organizations that share our vision of making the best of both worlds a reality.”
By combining Rocket Software’s industry-leading customer service with more resources to innovate, the company will be uniquely positioned in the market to not only meet customers’ immediate needs, but also help them transform over time. weather. These deep customer relationships will strengthen retention, expand cross-sell opportunities, and drive sustainable company growth.
Rocket Software intends to finance the acquisition with a combination of new cash capital from its existing shareholders, committed debt financing and cash from its balance sheet. The debt financing is expected to include secured term loans and new secured notes. Including anticipated synergies, the company expects the acquisition to be neutral in terms of total leverage, but leveraged in terms of collateral.
The transaction is expected to close in the second quarter of 2024, i.e. June 30, 2024, subject to receipt of relevant regulatory approvals and other customary closing conditions.
RBC Capital Markets, LLC, Barclays Capital Inc, Deutsche Bank Securities Inc and UBS Securities LLC are acting as financial advisors to Rocket Software. Ernst & Young LLP acted as accounting advisor to Rocket Software. Kirkland & Ellis LLP acted as legal counsel to Rocket Software. Debt financing for the transaction will be provided by RBC Capital Markets, Barclays Capital, Deutsche Bank Securities, UBS Securities, Citigroup Global Markets, HSBC Securities, Mizuho Securities and SMBC Nikko Securities.
SOURCE: BusinessWire