1st May 2008 07:01
Micro Focus International plc01 May 2008 1 May 2008 Recommended Cash Offer by Micro Focus International plc (LSE: MCRO.L) for NetManage, Inc. (NASDAQ:NETM) The Board of Micro Focus International plc ("Micro Focus" or "the Group") ispleased to announce it has reached agreement on a recommended cash offer (the "Offer") of US$7.20 per share for the entire issued and to be issued sharecapital of NetManage, Inc. ("NetManage"), the NASDAQ-listed software provider oftechnologies to transform core applications into new Web-based businesssolutions, and has entered into a merger agreement with NetManage which containscertain assurances in relation to the implementation of the Merger. The price represents a premium of approximately 73% per share based on theclosing price of US$4.15 per NetManage share at the close of business on 30April 2008, which is the last day of trading prior to this announcement. TheOffer values the existing issued share capital of NetManage at approximatelyUS$73.3 million including the value of all outstanding options. The transactionis conditional upon NetManage's minimum cash balance, immediately prior toclosing, being at least $25 million. The Board of Micro Focus believes that combining the businesses of Micro Focusand NetManage will further strengthen Micro Focus's position as a leading playerin the fast growing, highly fragmented Application Modernisation market. The Board of Micro Focus believes that the acquisition will be earningsenhancing in the year ended 30 April 2009 (before amortisation of intangibleassets and one-off integration and restructuring costs)1. The Directors of NetManage have unanimously approved the terms of the Offer. TheOffer is subject to approval by NetManage's shareholders and customary closingconditions and is expected to close in June 2008. Following the acquisition, Micro Focus plans to increase the margins of theNetManage business over time to a level consistent with Micro Focus's existingbusiness. The consequent restructuring charge is expected to be approximatelyUS$10.0 million in the financial year to 30 April 2009. About NetManage NetManage, which specialises in Application Modernisation software, is highlycomplementary to Micro Focus's core business. For the year to 31 December 2007, NetManage's net revenues were US$36.0 million.Maintenance revenues for the year to 31 December 2007 accounted forapproximately 62% of total revenues and have stabilised over the last twofinancial years at approximately US$22.0 million. Loss before tax for the 2007 financial year was US$1.7 million on a US GAAPbasis. NetManage's gross assets at 31 December 2007 were valued at US$42.7million of which US$25.4 million was held in cash, cash equivalents and shortterm investments. As a minimum at closing of the transaction, NetManage's cashbalance will be US$25 million, representing a minimum of US$2.6 per commonshare. Commenting on the Offer, Stephen Kelly, Chief Executive Officer of Micro FocusInternational plc, said: "The recommended offer for NetManage is consistent with Micro Focus's strategyof acquiring companies complementary to our core areas of expertise, wheresignificant synergies and benefits can be derived. The combination of MicroFocus and NetManage will enhance Micro Focus's position as a leading player inthe Application Modernisation market and provide the enlarged Group with furtheropportunities for growth through a more comprehensive and broader productoffering. Due to the complementary nature of the two businesses from a market,product and financial perspective, we are well placed to deliver value from thisacquisition. It is intended that the NetManage business will be fullyintegrated into the Micro Focus Group following completion of the Offer." In a separate announcement today, Micro Focus provided a pre-close update ontrading for the twelve months to 30 April 2008. 1 The expected cost savings have been calculated on the basis of the existingcost and operating structures of the current Micro Focus Group and NetManagegroup. These statements of estimated cost savings relate to future actions andcircumstances which by their nature involve risks, uncertainties, contingenciesand other factors. As a result, the cost savings referred to may not beachieved, or those achieved may be materially different from those estimated. Enquiries: Micro Focus Tel: +44 (0)1635 32646Chief Executive, Stephen KellyChief Financial Officer, Nick Bray Financial Dynamics Tel: +44 (0)20 7831 3113Harriet KeenHaya ChelhotHazel Stevenson Arma Partners (Financial advisor to Micro Focus) Tel: +44 (0)20 7290 8100Paul-Noel Guely UBS (Broker to Micro Focus) Tel: +44 (0) 20 7567 8000Nick Adams About Micro Focus Micro Focus (LSE: MCRO.L), is a London Stock Exchange-listed software companyheadquartered in the UK which provides innovative software that allows companiesto dramatically improve the business value of their enterprise applications.Micro Focus Enterprise Application Modernisation and Management software enablescustomers' business applications to respond rapidly to market changes andembrace modern architectures with reduced cost and risk. For additionalinformation please visit www.microfocus.com. About NetManage NetManage, Inc. (NASDAQ:NETM), is a NASDAQ-listed software company that providesthe fastest way to transform core applications into new Web-based businesssolutions. More than 10,000 customers worldwide, including the majority of theFortune 500, have chosen NetManage for mission critical application integration.For more information, please visit www.netmanage.com. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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