News
OpenText Buys Guidance Software
September 2017 by Marc Jacob
OpenText™ announced that it has completed the closing of the previously announced acquisition of Guidance Software, the makers of EnCase®, the gold standard in forensic security, that includes digital discovery solutions and endpoint information security.
Terms of the Acquisition
The previously announced tender offer expired at 12:00 midnight, Eastern time, on Wednesday, September 13, 2017 (the “Expiration Time”), and was not extended. The depositary for the tender offer advised OpenText and Galileo Acquisition Sub Inc. that immediately prior to the expiration of the tender offer there were validly tendered and not withdrawn (and excluding any shares tendered pursuant to guaranteed delivery procedures that have not yet been “received” (as defined in Section 251(h)(6)(f) of the Delaware General Corporation Law (“DGCL”)), a total of 25,275,699 shares of Guidance’s common stock. The validly tendered shares, together with the shares owned by Galileo Acquisition Sub Inc., OpenText and controlled affiliates, represent approximately 76.7% of the shares of Guidance’s common stock outstanding immediately prior to the Expiration Time. In addition, notices of guaranteed delivery have been delivered with respect to 539,639 shares of Guidance’s common stock. Galileo Acquisition Sub Inc. accepted for payment all shares tendered in the tender offer and will pay for all such tendered shares as soon as practicable in accordance with the terms of the offer.
Galileo Acquisition Sub Inc. subsequently completed the merger and was merged with and into Guidance (the “Merger”) without a stockholder vote to adopt the Merger Agreement or effect the Merger in accordance with Section 251(h) of the DGCL. Guidance is the surviving corporation and has become a wholly-owned subsidiary of OpenText. Guidance shares ceased trading on the NASDAQ Global Market on September 14, 2017. In connection with the Merger, each share of Guidance stock outstanding immediately prior to the effective time of the Merger (other than each share (i) held by OpenText or Guidance or held by a wholly-owned subsidiary of OpenText (including Galileo Acquisition Sub Inc.) or Guidance, which will be cancelled and cease to exist without any payment being made with respect to such share, or (ii) held by any Guidance stockholders who properly exercised appraisal rights under Section 262 of the DGCL with respect to such share) will be converted into the right to receive $7.10 per share in cash, without interest and net of applicable withholding of taxes.
Preliminary Financial Overview
As of June 30, 2017(1), the trailing twelve months revenue for Guidance was approximately $108.6 million. In the first twelve months after closing, OpenText expects the Purchase Price Allocation (PPA) impact combined with normal integration-based revenue disruptions to impact Guidance revenue by up to $30 million. The acquisition is expected to be on the OpenText non-GAAP operating model within the first twelve months after closing. Additional details will be provided with OpenText’s first quarter fiscal year 2018 earnings materials.
Guidance is expected to contribute insignificant revenue to OpenText’s results for the first quarter ending September 30, 2017, given the transaction is closing in September. Further details will be provided during OpenText’s first quarter fiscal year 2018 financial results call.
