British software giant Micro Focus International is selling its Linux operating system business to a private equity firm for 2.5 billion US dollars (£1.9 billion).
The SUSE division – which at its core is a business to business operating system service company – is being snapped up by Swedish private equity firm EQT just four years after being acquired by Micro Focus as part of its 2.4 billion US dollar (£1.8 billion) takeover of the Attachmate Group.
At the time it only accounted for a fifth of Attachmate’s revenues.
It was clear from the outset that the SUSE Business was an outstanding business with great people, great customers and fantastic products in a vibrant and dynamic marketKevin Loosemore, executive chairman of Micro Focus
Micro Focus said it had considered spinning off and listing the SUSE Business operations as a separate company, but the board decided earlier this year that it would not be in the best interest of investors.
The funds from the sale will be used to pay existing debt and may also be returned to shareholders.
The news sent Micro Focus shares to the top of the FTSE 100, rising more than 5% at the start of trading.
The deal is expected to be completed in the first quarter of 2019.
Kevin Loosemore, executive chairman of Micro Focus, said the deal provides the SUSE Business with “a strong, long-term investor to support it in its next phase of growth”.
He said: “It was clear from the outset that the SUSE Business was an outstanding business with great people, great customers and fantastic products in a vibrant and dynamic market.
“In the three-and-a-half years since that time we have invested significantly in the SUSE Business.
“Executing as a separate product portfolio has enabled Nils Brauckmann, CEO SUSE, and the team to deliver against the SUSE Business growth charter and enabled the SUSE Business to become a market leader in enterprise-grade, open source software-defined infrastructure and application delivery solutions to the benefit of customers and partners.”