Micro Focus to aquire Relativity Technologies

NEW DELHI, INDIA: Micro Focus International plc announced that the company's board of directors had reached at an agreement to acquire Relativity Technologies, Inc., a player in enterprise application modernisation solutions, for approximately $9.7 million in cash.

The deal would be subject to customary closing conditions and approval by Relativity shareholders. The transaction is expected to close before the end of December 2008.

Sources from the board said that combining the businesses of Micro Focus and Relativity would strengthen its position in the fast growing, highly fragmented application modernisation market. In addition, Relativity’s business operations will further expand Micro Focus’s geographic reach, partner relationships and international customer base.

Moreover, the acquisition would enhance its earnings by the year end on 30 April 2009 (before amortisation of intangible assets and one-off integration and restructuring costs).

Stephen Kelly, CEO, Micro Focus International plc, said: "In this tough macroeconomic environment, CEOs are trying to slash IT costs. Application modernisation project – which provide payback in weeks – answers that call. The combination of Micro Focus and Relativity will enhance Micro Focus’s position as a leading player in the expanding application modernisation market.” 

“We are well placed to capture significant value from this acquisition. It is intended that the Relativity business will be fully integrated into the Micro Focus group following completion of the transaction. The acquisition of Relativity is consistent with Micro Focus’s strategy of acquiring companies that complement our core areas of expertise and where significant synergies can be derived,” Kelly added.