Mr. Mark Barrenechea reports

OPENTEXT TO DIVEST APPLICATION MODERNIZATION AND CONNECTIVITY (AMC) BUSINESS TO ROCKET SOFTWARE FOR $2.275B

Open Text Corp. has reached a definitive agreement to divest its AMC business to Rocket Software Inc., a Bain Capital portfolio company, for $2,275-million in cash. All dollar amounts in this press release are in U.S. dollars unless otherwise indicated. Open Text's AMC business provides market-leading mainframe modernization and connectivity software to more than 10,000 customers, enabling them to run mission-critical business applications in hybrid cloud environments. Benefits of the transaction include:

• Reinforces and expands Open Text's focus on cloud and artificial intelligence;
• Results in more predictable growth;
• Increases focus on cloud growth opportunities;
• Accelerates deleverage plan, expect to be under three times consolidated net leverage ratio within 90 days of closing;
• Returns Open Text to capital flexibility, including potential future share buybacks.

"The growth prospects for information management have never been better. We are divesting our mainframe business so we can singularly focus on the powerful cloud and AI opportunities within information management. This divestiture will better position us to move with more speed in higher-organic-growth areas such as cloud capabilities and AI, strengthens our balance sheet to achieve our deleveraging targets ahead of schedule, and returns the company to capital flexibility. This divestiture supports our focus on creating value for our shareholders," said Mark J. Barrenechea, Open Text chief executive officer and chief technology officer.

About the transaction:

• $2,275-million all-cash purchase price before taxes and fees;
• Sale price of 4.6 times AMC's fiscal 2023 revenue of approximately $500-million;
• Sale price of 8.3 times AMC's fiscal 2023 adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of approximately $275-million;
• Net proceeds to reduce debt, to be applied to the acquisition term loan and term loan B;
• Expect to close in Open Text's fourth fiscal quarter ending June 30, 2024, subject to regulatory approvals and customary closing conditions.

The combination of AMC and Rocket Software's highly complementary product portfolios will create one of the world's largest information technology and mainframe modernization and connectivity software companies. Under the terms of the agreement, the software, associated services and approximately 750 employees of AMC will be integrated into Rocket Software.

Until closing, Open Text and Rocket Software will continue to constructively collaborate to protect customer investments and expand offerings for joint customers.

Goldman Sachs & Co. LLC is serving as sole financial adviser to Open Text and Cleary Gottlieb Steen & Hamilton LLP is acting as legal adviser to Open Text.

Conference call information

The public is invited to listen to the Open Text conference call today at 5 p.m. ET (2 p.m. PT). Dial one of the following numbers to join the queue to speak with an operator: 1-800-319-4610 (toll-free) or 1-604-638-5340 (international). Please dial in 15 minutes ahead of time to ensure proper connection. Alternatively, a live webcast of the conference call will be available on the investor relations section of the company's website.

A replay of the call will be available beginning Nov. 28, 2023, at 6:30 p.m. ET through 11:59 p.m. on Dec. 12, 2023, and can be accessed by dialling 1-855-669-9658 (toll-free) or 1-604-674-8052 (international) and using passcode 0572 followed by the number sign.

About Open Text Corp.

Open Text, the information company, enables organizations to gain insight through market-leading information management solutions, powered by OpenText Cloud Editions.

We seek Safe Harbor.