Canada's Open Text to buy cloud services company for $1.17 billion
(Reuters) - Canadian business software maker Open Text Corp said it would buy privately held cloud services company GXS Group Inc for $1.17 billion.
Open Text, whose customers include Microsoft Corp and Oracle Corp, makes software that helps companies manage documents and workflows.
Open Text has been pushing into the market for cloud computing services as businesses increasingly turn to cheaper services hosted over the Internet from proprietary software.
GXS has 40,000 customers who use its cloud services to launch products, pay accounts, make e-payments and run their supply chains.
Open Text said in a statement on Tuesday that it would pay about $1.07 billion of the deal amount in cash and $100 million in its common shares.
The deal price is 2.4 times GXS's fiscal 2012 revenue of $487 million.
GXS stockholders will own about 2.1-2.4 percent of Open Text's outstanding common shares after the deal is completed.
The deal, Open Text's fourth acquisition this year, is expected to close within 90 days and add to the company's adjusted earnings for the year ending June 2014.
Open Text has obtained a committed bank financing of up to $800 million from Barclays and RBC Capital Markets, and will finance the cash portion of the deal with the loan and cash on hand. Continued...