Micro Focus and Borland announced their acquisition agreement on May 6, 2009, with an initial offer of $1.00 per share and an announced aggregate transaction value of about $75 million. That was not the only price later reported: the offer rose to $1.50 per share, the deal closed in July, and Micro Focus’s 2009 annual report later listed a gross purchase price of about $113 million. Those figures describe different transaction stages or measures; the available company documents do not fully reconcile them.
What did Micro Focus initially offer for Borland?
The original agreement called for Micro Focus to acquire Borland in a cash merger. Borland’s May 6, 2009 announcement put the initial consideration at $1.00 for each outstanding share and described the aggregate transaction value as approximately $75 million. The underlying agreement specified that eligible common shares would convert into a right to receive $1.00 in cash; certain vested, in-the-money options had separate cash treatment.
Borland said the initial $1.00 offer represented a 25% premium to its May 5 closing share price of $0.80, and about 67% above the average closing price of $0.60 for the preceding 30 trading days. These are comparisons stated in Borland’s announcement, not a guarantee of what shareholders ultimately received. Borland’s May 6, 2009 announcement and its merger-agreement filing document the initial terms.
Was $75 million the final purchase price?
Not as the only figure in the company records. By the June 30, 2009 amendment, the per-share consideration had increased from $1.15 to $1.50. The amendment also raised the termination fee in specified circumstances from $4 million to $5.2 million. Borland’s filing documents the revised terms: June 30, 2009 amendment announcement.
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Micro Focus’s 2009 annual report subsequently reported a gross purchase price of approximately $113 million and said the acquisition closed on July 27. The roughly $75 million figure was the announcement-stage aggregate transaction value tied to the initial $1.00-per-share terms; the roughly $113 million figure is the later annual-report gross purchase price. Because the documents use different measures and do not fully explain the components of the difference, neither number should be presented as a direct restatement of the other. Micro Focus’s 2009 annual report reports the later figure.
When was the acquisition approved and completed?
- May 5, 2009: Borland and Micro Focus entered into the merger agreement, which provided for $1.00 in cash per eligible common share.
- May 6, 2009: Borland publicly announced the agreement and the approximately $75 million initial aggregate transaction value.
- June 17 and June 30, 2009: The agreement was amended; the June 30 filing recorded consideration of $1.50 per share.
- July 22, 2009: Borland announced that shareholders had adopted the amended agreement. Borland’s stockholder-approval announcement records the vote.
- July 27, 2009: Micro Focus announced completion of the acquisition. Micro Focus’s completion announcement gives the closing date.
Why did Micro Focus buy Borland?
Micro Focus presented the acquisition as a way to expand in application testing. It said the Borland deal, combined with its June 1, 2009 acquisition of Compuware’s application testing and automated software quality business, strengthened its position in a market it viewed as complementary to its core application management and modernization business.
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That is the acquirer’s stated strategic rationale, not independent evidence that the expected business benefits were achieved. Micro Focus’s completion announcement estimated the application testing and automated software quality market at about US$2 billion a year; that figure was the company’s estimate at the time, not an independently verified market-size measurement. Borland described its business as open application lifecycle management, while contemporaneous coverage also characterized it as a developer of application lifecycle management tools. Computerworld’s 2009 coverage provides that contemporary context.
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