Micro Focus Fixed Income Presentation Deck
Announcement 'At A Glance' - Key Points
Industry Logic
Aggregate Consideration
Micro
Focus
HPE
Software
Merger of Micro Focus International
plc HPE's Software Business
Segment
$.
Creates one of the world's largest
pure-play infrastructure software
companies
SUSE & HPE
Micro Focus and HPE have
separately entered into a
commercial partnership naming
SUSE as HPE's preferred Linux
partner
~$8.8¹
billion
Aggregate Transaction Value
$738m²
Acquired EBITDA
3
11.4x¹
Acquired EBITDA Multiple
HPE Software EV/Sales 4: 2.64x
TAG EV/Sales 4: 2.46x
Combination
-$4.5
billion
5
Combined Revenue
-$1.355
billion
Combined Underlying
Adjusted EBITDA6
("UAEBITDA")
Micro Focus HPE Software
46% vs 21%
12 months to 30 April 2016
EBITDA margin comparison
Significant scope for operational
efficiency gains
Shareholder Impact
-$400m RoV
$1.68 per ordinary share to existing
Micro Focus shareholders prior to
Completion
Ownership
Micro Focus
HPE
shareholders
49.9% vs 50.1%
Post Completion ownership based on
fully diluted share capital of the pro
forma entity
Expected Completion
Q3 CY2017
Subject to satisfying closing conditions
¹ Based upon the closing share price of Micro Focus as at 6 September 2016; Consideration comprises $6.3bn in Micro Focus equity to HPE shareholders and $2.5bn cash payment to HPE 2 Acquired EBITDA is UAEBITDA adjusted
for overhead costs of c.$80m that will not transfer to Micro Focus as part of this transaction; Multiple calculated based on effective Enterprise Value of $8.8bn less $400m assumed Return of Value to Micro Focus shareholders
divided by Acquired LTM Q2 2016 Underlying Adjusted EBITDA of $738m; + Sales multiples represent implied transaction value at announcement divided by announced Sales metrics; HPE Software Q2 2016 LTM Sales of $3,172m;
Attachmate Group respective transaction value and Revenue FYE March 2014 of $2.350m and $957m; Combined revenues and UAEBITDA based on the twelve months to 30 April 2016, adjusted for the acquisition of Serena;
Underlying Adjusted EBITDA removes the impact of net capitalisation/amortisation of development costs and foreign currency gains and losses from Adjusted EBITDA; Combined Underlying Adjusted EBITDA assumes Micro Focus
UAEBITDA of $613m and HPE Software Acquired EBITDA of $738m 7 Micro Focus margin ex-SUSE and Serena; unadjusted for overhead costs of c.$80m that will not transfer to Micro Focus as part of this transaction; * Based on
fully diluted shares outstanding as at 6 September 2016, calculated using the Treasury Share Method
20
MICRO
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