Roper Technologies to acquire Frontline Education

BY Fraser Tennant

In a move to reposition itself as a software firm, US diversified industrial company Roper Technologies, Inc. has acquired school administration software provider Frontline Education from private equity firm Thoma Bravo in an all-cash transaction valued at $3.7bn.

The sale follows a five-year partnership between Thoma Bravo and Frontline during which Thoma Bravo leveraged its specialised operating model and deep sector expertise to enable Frontline to drive profitable growth and expand its market leadership in the K-12 education sector.

Moreover, since its acquisition of Frontline in 2017, Thoma Bravo has completed six highly strategic acquisitions, significantly grown its revenue, expanded its market leading product portfolio from 16 to 30 products and increased headcount by over 70 percent – all while bringing increased value to school districts across the US.

“Thoma Bravo’s investment in Frontline is another clear example of our deep expertise across education, software and strategic M&A to accelerate growth and drive positive impacts – in this case promoting highly efficient and effective K-12 district operations,” said Brian Jaffee, a partner at Thoma Bravo. “We have enjoyed our close partnership with Mark and the Frontline management team and are excited to watch the business continue to thrive with a great new partner in Roper.”

The transaction is expected to close in the fourth quarter of 2022, subject to regulatory approvals and customary closing conditions.

“Frontline has a proven track record of strong organic and inorganic growth, excellent cash conversion and an outstanding management team that will thrive as part of Roper,” said Neil Hunn, president and chief executive of Roper Technologies. “This acquisition demonstrates our disciplined capital deployment strategy that focuses on identifying high-quality, market-leading technology businesses.”

Frontline’s management team will continue to lead the business from its Malvern, Pennsylvania headquarters. The company’s name, brands and office locations will not change as a result of the transaction.

“We are deeply appreciative of Thoma Bravo’s partnership over the last five years, which have allowed us to deliver an expanded portfolio of mission-critical solutions,” concluded Mark Gruzin, chief executive of Frontline Education. “Roper’s acquisition of Frontline Education represents the next phase of our journey.”

News: Roper eyes U.S. teacher shortage in $3.7 billion deal for Frontline Education

Micro Focus sold for $6bn

BY Richard Summerfield

Canadian software company OpenText has agreed to acquire UK tech firm Micro Focus in a deal worth around $6bn. The all-cash acquisition, once completed, will make OpenText one of the world’s largest software and cloud businesses.

Under the terms of the acquisition, the total enterprise value of the deal is around $6bn or £5.1bn, with an equity value of around $2.1bn (£1.8bn). The companies calculated that the per-share price offered, some 532 pence, represents a 98.3 percent premium to the closing price of Micro Focus before the deal was announced.

Micro Focus has experienced financial difficulties in recent years, with declining revenue every year since 2018. Further, its stock price has dropped over 44 percent this year and more than 89 percent for the prior five years. Regardless of these difficulties, Micro Focus remains one of the world’s largest software companies and serves thousands of organisations globally, including many of the largest companies in the Fortune Global 500 and had approximately $2.7bn pro forma trailing 12 months revenue for the period ended 30 April 2022, according to a statement announcing the deal.

“We are pleased to announce our firm intention to acquire Micro Focus, and I look forward to welcoming Micro Focus customers, partners and employees to OpenText,” said Mark J. Barrenechea, chief executive and chief technology officer at OpenText. “Upon completion of the acquisition, OpenText will be one of the world’s largest software and cloud businesses with a tremendous marquee customer base, global scale and comprehensive go-to-market. Customers of OpenText and Micro Focus will benefit from a partner that can even more effectively help them accelerate their digital transformation efforts by unlocking the full value of their information assets and core systems.”

He continued: “Micro Focus brings meaningful revenue and operating scale to OpenText, with a combined total addressable market (TAM) of $170 billion. With this scale, we believe we have significant growth opportunities and ability to create upper quartile adjusted EBITDA and free cash flows. We expect Micro Focus to be immediately accretive to our adjusted EBITDA. Micro Focus will benefit from the OpenText Business System to create stronger operations and significant cash flows, and Micro Focus customers will benefit from the OpenText Private and Public Clouds.”

OpenText intends to fund the acquisition by raising $4.6bn in new debt, $1.3bn in cash and drawing $600m from its existing revolving credit facility. OpenText said it expects cost savings of $400m after the deal closes.

News: OpenText to Acquire Micro Focus International plc

Pfizer to acquire Global Blood Therapeutics in $5.4bn deal

BY Fraser Tennant

In a deal that enhances its presence in rare haematology, US multinational pharmaceutical and biotechnology corporation Pfizer Inc. is to acquire biopharmaceutical company Global Blood Therapeutics, Inc. (GBT).

Under the terms of the definitive agreement, Pfizer will acquire all the outstanding shares of GBT for $68.50 per share in cash, for a total enterprise value of approximately $5.4bn, including debt and net of cash acquired.

The acquisition complements and further enhances Pfizer’s more than 30-year heritage in rare haematology and reinforces the company’s commitment to sickle cell disease (SCD) by bringing expertise and a leading portfolio and pipeline with the potential to address the full spectrum of critical needs in this underserved community.

A lifelong, debilitating inherited blood disorder characterised by haemolytic anaemia, acute pain crises and progressive end organ damage, SCD impacts millions of people worldwide, predominantly in populations of African, Middle Eastern and South Asian descent.

“This transaction is an exciting milestone that accelerates GBT’s mission to discover, develop and deliver life-changing treatments that provide hope to underserved patient communities,” said Ted W. Love, president and chief executive of GBT. “Pfizer will broaden and amplify our impact for patients and further propel much-needed innovation and resources for the care of people with SCD and other rare diseases, including populations in limited-resource countries.”

Pfizer intends to continue to build on GBT’s shared commitment to and engagement with the SCD community by accelerating distribution of its innovative treatment – voxelotor tablets – to parts of the world most impacted by SCD.

“The deep market knowledge and scientific and clinical capabilities we have in rare hematology will enable us to accelerate innovation for the SCD community and bring treatments to patients as quickly as possible,” said Albert Bourla, chairman and chief executive of Pfizer. “We are excited to welcome GBT colleagues into Pfizer and to work together to transform the lives of patients, as we have long sought to address the needs of this underserved community.”

The boards of both companies have unanimously approved the transaction, which is subject to customary closing conditions, including receipt of regulatory approvals and approval by GBT’s stockholders.

Mr Love concluded: “We look forward to working together with Pfizer to serve our communities and advance our shared goal of improving health equity and expanding access to life-changing treatments to create a healthier future for all.”

News: Flush with cash, Pfizer buys Global Blood Therapeutics in $5.4 billion deal

iRobot acquired by Amazon

BY Richard Summerfield

iRobot Corporation, a company which designs and builds consumer robots, has agreed to be acquired by Amazon in an all-cash transaction valued at $1.7bn including net debt.

According to a statement announcing the deal, Amazon will pay $61 per share to acquire the company. The agreed price represents a premium of 22 percent to the stock’s last closing price of $49.99. Completion of the transaction is subject to customary closing conditions, including approval by iRobot’s shareholders and regulatory approvals. On completion, Colin Angle will remain as chief executive of iRobot.

“We know that saving time matters, and chores take precious time that can be better spent doing something that customers love,” said Dave Limp, senior vice president of Amazon Devices. “Over many years, the iRobot team has proven its ability to reinvent how people clean with products that are incredibly practical and inventive—from cleaning when and where customers want while avoiding common obstacles in the home, to automatically emptying the collection bin. Customers love iRobot products—and I’m excited to work with the iRobot team to invent in ways that make customers’ lives easier and more enjoyable.”

“Since we started iRobot, our team has been on a mission to create innovative, practical products that make customers’ lives easier, leading to inventions like the Roomba and iRobot OS,” said Mr Angle. “Amazon shares our passion for building thoughtful innovations that empower people to do more at home, and I cannot think of a better place for our team to continue our mission. I’m hugely excited to be a part of Amazon and to see what we can build together for customers in the years ahead.”

Amazon has undertaken a significant push toward robotics and connected devices of late. The company is increasing its efforts to transform its Alexa-enabled smart devices from stationary objects into mobile machines. Amazon has its own mobile robot, which is currently only available for purchase via invitation. The company also offers its own flying security drone called the Always Home Cam, which is available through its Ring business.

The quantity of data which Roomba vacuums collect on households will no doubt be extremely valuable to Amazon as it continues to roll out more smart devices. However, the deal has already begun to attract concern from privacy advocates. The iRobot deal comes hot on the heels of Amazon’s $3.9bn deal to acquire the direct primary-care company One Medical, operating as 1Life Healthcare Inc, which itself sparked concerns about data privacy.

Though it is unknown if the iRobot transaction will attract significant regulatory scrutiny, if the deal falls through, Amazon would be required to pay iRobot a $94m termination fee.

News: Alexa! Start my Roomba: Amazon buys robot vacuum maker for $1.7 billion

Consortium to acquire Mediclinic in £3.7bn deal

BY Richard Summerfield

Mediclinic International, a private hospital group based in South Africa, has agreed to be acquired by a consortium comprised of Remgro Ltd and MSC Mediterranean Shipping in deal worth £3.7bn.

Under the terms of the deal, shareholders of Mediclinic will receive 504 pence in cash for each share of Mediclinic, a premium of 23 percent from the day before the final offer was made in early June, the companies said. The deal comes after an earlier offer of £3.4bn was rejected in June by Mediclinic.

Remgro is the investment vehicle of the Rupert family which already owns a 45 percent stake in Mediclinic. The two companies will each own 50 percent of Mediclinic under the terms of the deal.

“The recommended offer represents a near-term value realisation for Mediclinic shareholders at an attractive premium,” said Dame Inga Beale, chair of Mediclinic. “Over 39 years, Mediclinic has developed into the leading international healthcare services group it is today. During this time, Remgro has remained a supportive long-term shareholder. Together with SAS, the consortium’s resources will put Mediclinic in a strong position to continue to serve patients through our broad range of high-quality healthcare services.”

“I am delighted that Remgro is participating in this transaction, which is fully aligned with our strategy of prioritising our ownership of structurally attractive, unlisted assets,” said Jannie Durand, chief executive of Remgro. “Since its founding, Remgro has been a long-standing and supportive shareholder of Mediclinic. We are proud of what the business has achieved over that period and look forward to continuing our support, alongside our partner SAS, as the business transitions to the next phase of its evolution under stable, long-term ownership. Under the stewardship of the Consortium, Mediclinic will be well-positioned to execute on its strategy and undertake the investment required to realise the full potential of the business.”

“We are delighted to be partnering with Remgro on the acquisition of Mediclinic, a business we have great admiration for,” said Diego Aponte, group president of MSC. “MSC is very well placed to provide long-term capital, as well as our insight and experience from operating a global business, in order to support the strategic ambitions of the Mediclinic management team. We believe that, alongside Remgro, our ownership will provide Mediclinic with significant resources to the benefit of all of Mediclinic’s stakeholders, including in particular its patients, employees, doctors and host governments.”

News: Consortium to buy S.Africa hospitals firm Mediclinic for $4.49 bln