Item 1.01. Entry into a Material Definitive Agreement.
On December 1, 2022, Open Text Corporation ("OpenText" or the "Company") and
certain of its subsidiaries entered into an amendment (the "Term Loan
Amendment") to the Company's Credit Agreement, dated as of August 25, 2022 (the
"Existing Term Loan Credit Agreement", and as amended, supplemented or otherwise
modified as of the effective date of the Term Loan Amendment, including by the
Term Loan Amendment, the "Term Loan Credit Agreement"), among the Company, the
lenders party thereto, the subsidiary guarantors party thereto and Barclays Bank
PLC, as administrative agent and collateral agent.
The Term Loan Amendment provides for an increase in the aggregate commitments
under the Existing Term Loan Credit Agreement to $3.585 billion. At the
Company's election, loans made under the Term Loan Credit Agreement will bear
interest at (i) the Base Rate (as defined in the Term Loan Credit Agreement)
plus an applicable margin of 2.50%, (ii) Term SOFR (as defined in the Term Loan
Credit Agreement) plus an applicable margin of 3.50% and the SOFR Adjustment (as
defined in the Term Loan Credit Agreement) or (iii) Daily Simple SOFR (as
defined in the Term Loan Credit Agreement) plus an applicable margin of 3.50%
and the SOFR Adjustment.
The foregoing description of the Term Loan Amendment does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Term Loan Amendment, which is filed herewith as Exhibit 10.1 to this Current
Report on Form 8-K and incorporated herein by reference.
Item 1.02. Termination of a Material Definitive Agreement.
On December 1, 2022, the Company and certain of its subsidiaries entered into an
amendment (the "Bridge Loan Amendment") to the Company's Bridge Loan Agreement,
dated as of August 25, 2022 (the "Existing Bridge Loan Agreement", and as
amended, supplemented or otherwise modified as of the effective date of the
Bridge Loan Amendment, including by the Bridge Loan Amendment, the "Bridge Loan
Agreement"), among the Company, the lenders party thereto, the subsidiary
guarantors party thereto and Barclays Bank PLC, as administrative agent and
collateral agent. The Bridge Loan Amendment reflects the reallocation of
commitments under the Existing Bridge Loan Agreement to the Term Loan Credit
Agreement (as described above).
In connection with the Bridge Loan Amendment and the receipt of the proceeds
from the issuance and sale of Notes (as defined below) as further described in
Item 2.03 below, all remaining commitments under the Bridge Loan Agreement were
reduced to zero and terminated.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
On December 1, 2022, OpenText issued and sold $1 billion in aggregate principal
amount of 6.90% senior secured notes due 2027 (the "Notes") in connection with
the funding of its proposed acquisition (the "Acquisition") of Micro Focus
International plc ("Micro Focus").
The Notes were issued pursuant to an indenture (the "Indenture"), dated as of
December 1, 2022, among the Company, the subsidiary guarantors party thereto
(the "Guarantors"), The Bank of New York Mellon, as U.S. trustee and Notes
collateral agent, and BNY Trust Company of Canada, as Canadian trustee.
The Notes bear interest at a rate of 6.90% per annum, payable semi-annually in
arrears on June 1 and December 1, commencing on June 1, 2023. The Notes will
mature on December 1, 2027, unless earlier redeemed or repurchased.
The Company may redeem all or a portion of the Notes at any time prior to
November 1, 2027 (the "Par Call Date"), at a redemption price (expressed as a
percentage of principal amount and rounded to three decimal places) equal to the
greater of (a) 100% of the principal amount of the Notes to be redeemed and
(b) the net present value of the remaining scheduled payments of principal and
interest thereon discounted to the Par Call Date less interest accrued to the
date of redemption, plus accrued and unpaid interest to, but excluding, the
redemption date. On or after the Par Call Date, the Company may redeem the
Notes, in whole or in part, at any time and from time to time, at a
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redemption price equal to 100% of the principal amount of the Notes being
redeemed plus accrued and unpaid interest thereon to the redemption date.
If the Company experiences one of the kinds of change of control triggering
events specified in the Indenture, the Company will be required to make an offer
to repurchase the Notes at a price equal to 101% of the principal amount of the
Notes, plus accrued and unpaid interest, if any, to the date of purchase.
If the Acquisition is not (or OpenText determines, in its reasonable judgment,
the Acquisition will not be) consummated on or before May 31, 2023, or, where
such date must be extended to comply with the requirements of the UK Panel on
Takeovers and Mergers such later date that is no later than: (a) where the
Acquisition proceeds by way of a Scheme (as defined in the Term Loan Credit
Agreement), the date that is six weeks after May 31, 2023; or (b) where the
Acquisition proceeds by way of an Offer (as defined in the Term Loan Credit
Agreement), the date that is eight weeks after May 31, 2023, the Company will be
required to redeem all of the Notes at a redemption price equal to 101% of the
principal amount of the Notes, plus accrued and unpaid interest.
The Notes will be guaranteed on a senior secured basis by OpenText's existing
wholly-owned subsidiaries organized in the United States or Canada that borrow
or guarantee OpenText's obligations under its senior credit facilities and,
concurrent with or within one business day of the closing of the Acquisition,
additionally by Open Text UK Holding Limited. The Notes and related guarantees
will be secured with the same priority as the Company's senior credit
facilities. The Notes and the related guarantees will be effectively senior to
all of the Company's and the guarantors' senior unsecured debt to the extent of
the value of the Collateral (as defined in the Indenture) and will be
structurally subordinated to all existing and future liabilities of each of the
Company's existing and future subsidiaries that do not guarantee the Notes.
The Indenture contains covenants that limit the Company and certain of the
Company's subsidiaries' ability to, among other things: (i) create certain liens
and enter into sale and lease-back transactions; (ii) create, assume, incur or
guarantee additional indebtedness of the Company or certain of the Company's
subsidiaries without such subsidiary becoming a subsidiary guarantor of the
Notes; and (iii) consolidate, amalgamate or merge with, or convey, transfer,
lease or otherwise dispose of the Company's property and assets substantially as
an entirety to, another person. These covenants are subject to a number of
important limitations and exceptions as set forth in the Indenture. The
Indenture also provides for certain events of default, which, if any of them
occurs, may permit or, in certain circumstances, require the principal, premium,
if any, interest and any other monetary obligations on all the then-outstanding
Notes to be due and payable immediately.
The Notes and related guarantees have not been and will not be registered under
the Securities Act of 1933, as amended (the "Securities Act"). The Notes and
related guarantees were not offered or sold within the United States or to, or
for the account or benefit of, U.S. persons (as defined in Regulation S under
the Securities Act), except to persons reasonably believed to be qualified
institutional buyers in reliance on the exemption from registration provided by
Rule 144A under the Securities Act, and were offered or sold to certain non-U.S.
persons in offshore transactions in reliance on Regulation S under the
Securities Act. The Notes have not been and were not qualified for sale to the
public by prospectus under applicable Canadian securities laws and, accordingly,
any offer and sale of the Notes in Canada were made on a basis which is exempt
from the prospectus requirements of such securities laws.
The foregoing description of the Indenture does not purport to be complete and
is qualified in its entirety by reference to the full text of the Indenture,
which is filed herewith as Exhibit 4.1 to this Current Report on Form 8-K and
incorporated herein by reference.
The description of the Term Loan Credit Agreement set forth in Item 1.01 above,
and the related Exhibit 10.1, are incorporated herein by reference.
Item 7.01. Regulation FD.
On December 1, 2022, OpenText issued a press release that the Company had issued
and sold $1 billion in aggregate principal amount of the Notes pursuant to Rule
144A and Regulation S under the Securities Act, executed an amendment to the
Existing Term Loan Credit Agreement and terminated all commitments under the
Bridge Loan
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Agreement, all in connection with the Acquisition. A copy of this press release
is furnished as Exhibit 99.1 hereto and is incorporated herein by reference. The
information furnished pursuant to this Item 7.01, including Exhibit 99.1, shall
not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or incorporated by reference in any
filing under the Securities Act, or the Exchange Act, except as may be expressly
set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
4.1 Indenture governing the Company's 6.90% senior secured notes due 2027,
dated as of December 1, 2022, among the Company, the subsidiary guarantors
party thereto, The Bank of New York Mellon, as U.S. trustee and Notes
collateral agent, and BNY Trust Company of Canada, as Canadian trustee.
4.2 Form of the Company's 6.90% senior secured notes due 2027 (included in
Exhibit 4.1)
10.1 First Amendment to Credit Agreement, dated December 1, 2022, by and
among the Company, the guarantors party thereto, Barclays Bank PLC, as
administrative agent and collateral agent, and certain financial
institution parties thereto.
99.1 Press Release, dated December 1, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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