Micro Focus has acquired Borland in a $75m deal and also picked up the application testing and automated software quality business of Compuware in a move that will strengthen its position in that market.
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The acquisitions come on the back of a strong fourth quarter for the British based Micro Focus which stated its intention to grow through acquisition after running a strategic review back in 2006, which has already seen it pick up five companies.
Both of the deals are being self financed with Micro Focusable to lean on a three year revolving credit facility of $175m and it is expected to shortly announce numbers for its Q4 showing increases in both revenue and profit.
The Borland deal will provide greater exposure to the US market and bolster the ambitions to take a major slice of the application testing market. For its last financial year Borland made pre-tax losses of $204m.
Stephen Kelly, CEO at Micro Focus, said it had been able to grow organically but the Borland deal would provide it with more breadth.
“I am confident that our successful track record ineffectively integrating acquisitions over the last three years equips us well to deliver value to shareholders from this transaction,” he said.
He added that it had also made the move to buy Compuware added to an area where it was already carving out a name in the market.
“Acquiring the Compuware Testing and ASQ business is a logical extension to our existing application management proposition, and we see strong growth potential in this market,” he said.
Compuware’s decision to make an $80m divestment of its quality testing business will impact 330 employees and was described by president and CEO Bob Paul as a way of improving the focus on its core business.
If given the required approval the deals should both close in the next few months.