WASHINGTON (dpa-AFX) - Micro Focus International Plc (MCRO.L), a British multinational software and information technology company, said Wednesday it has agreed to sell its Digital Safe business to Smarsh Inc., an electronic communications archiving solutions, for $375 million in cash. The transaction is expected to complete in the first three-month period of the next calendar year.
Stephen Murdoch, Micro Focus CEO commented: '.Looking ahead, Archiving and Risk Management is changing rapidly and becoming an increasingly specialised area. We believe that by combining the Digital Safe business with Smarsh, a leading innovator in this area, our Digital Safe customers and employees will see significant benefits and be better served for the long term.'
The UK-based seller aims to use the net proceeds of the transaction to reduce its gross debt. It said, it is the intention of the Board to use the net proceeds of the transaction, estimated at $335 million net of fees, taxation and separation costs to reduce gross debt.
For the fiscal 2021, the Digital Safe business is expected to generate about $109 million in revenue, a decline of approximately 11 percent at constant currency compared to the prior year. The business is also expected to contribute $30 million of adjusted EBITDA less cash costs associated with lease payments for the current fiscal.
As of April 30, the half year, the total gross assets of the Digital Safe Business were about $373 million and net assets were about $277 million, including lease obligations totaling $43 million. The transfer of these lease obligations are expected to reduce the Group's net debt accordingly, Micro Focus said in a statement.
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