The Waterloo, Ont.-based software firm’s share price dropped as much as 13.3 per cent on the Nasdaq on Friday, giving up all its pandemic gains. OpenText announced it would buy Micro Focus in a US$6-billion deal, including the firm’s cash and debt, after markets closed on Thursday. (The Logic)

Talking point: Newbury, U.K.-based Micro Focus made US$2.9 billion in its 2021 fiscal year ending in October, down 5.3 per cent year over year, with the firm slowing but not stopping its sales decline. The new acquisition is likely to be a “a multi-year turnaround story” for OpenText, CIBC Capital Markets analyst Stephanie Price wrote in an investor note, downgrading the stock to neutral. While OpenText made 44 per cent of its US$3.5 billion in revenue last year from its cloud business and subscriptions, recurring sales account for just five per cent at Micro Focus. “If I look at where Micro Focus is, it’s where OpenText was five years ago,” said CEO Mark Barrenechea on BNN Bloomberg, downplaying concerns about diluting cloud share. “We’re going to look a lot like SAP [and] Oracle—that’s good company to be in.”