OpenText to acquire Vector Capital backed Covisint for US $103M

OpenText (TSX/NASDAQ: OTEX), a global leader in Enterprise Information Management (EIM), has entered into a definitive agreement to acquire Covisint Corporation (NASDAQ: COVS), the leading Cloud platform for building Identity, Automotive, and Internet of Things (IoT) applications.

The transaction purchase price of US $2.45 per share is approximately US $103 million of market value, or US $75 million of enterprise value.

Crowell & Moring LLP acts as legal counsel to OpenText. Evercore is serving as financial advisor to Covisint and Paul Hastings LLP is acting as legal counsel.

The acquisition is expected to deepen OpenText’s EIM offering with a cloud-based IoT platform-as-a-service and expand OpenText’s presence in the Automotive industry through strong customer relationships and strategic partnerships for supply chain collaboration. Covisint will be integrated into the OpenText Business Network, a portfolio of cloud solutions and software that facilitates efficient, secure, and compliant information flows between organizations.

OpenText intends to fund the transaction with cash on hand. The transaction is expected to close in the third quarter of calendar 2017 and is subject to customary closing conditions, including approval by shareholders of Covisint.

Vector Capital owns 3,469,853 or 8.4% of Covisint shares. In May 2016, Vector Capital has expressed interest in taking the company private for an unspecified price. Vector Capital along with other institutional shareholders including Dialectic Capital Management, LP have been pushing for the sale of company.

photo credit: Covisint Corporation

Ted Liu

Ted Liu, M.Sc. (Mining, Queen's), MBA (Finance, Toronto), is the Editor of Private Capital Journal, CanadaMetals.ca, TechWire.ca, and the former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, having most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA).

Ted is the architect of CVCA infobase, and is the architect of CPE Media's Financings.ca, Canada's most sophisticated and advanced all private capital and public market financing database.