Micro Focus Lender Presentation 20 February 2020
Disclaimer This presentations has been prepared solely to provide a basis for for potential providers of finance to consider whether to assist Micro Focus International PLC (“Micro Focus") and its subsidiaries (each a “Company” and together, the “Companies ") with their evaluation of raising new debt facilities in connection with a potential refinancing transaction involving the Companies (the “Transaction). The existence of this presentation, the information contained within it and any information otherwise made available, whether orally or in writing, in connection herewith is confidential and is being made on the basis that the recipients keep such information confidential and use such information solely for the purposes contemplated hereby. This presentation must not be copied, reproduced, published, distributed, disclosed or passed to any other person at any time except in accordance with the confidentiality agreement entered into by you with Micro Focus in relation to the Transaction. This presentation is being communicated in the United Kingdom only to persons who have professional experience in matters relating to investments, i.e. investment professionals falling within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended and to persons to whom it is otherwise lawful to distribute it. This presentation is not for publication, distribution or release, directly or indirectly, in or into or from Australia, Canada, New Zealand, Japan, South Africa, or any other state or jurisdiction in which the same would be restricted, unlawful or unauthorised. This presentation is for information purposes only and shall not constitute an offer to buy, sell, issue, or acquire, or the solicitation of an offer to buy, sell, issue, or acquire any securities. This presentation may include material non-public information or inside information under Regulation (EU) No 596/2014 (Market Abuse Regulation) and accordingly, recipients agree not to use all or any of the Information contained in this presentation to deal, for its account or the account of any third party, directly or indirectly, in any securities of the Company (or engage in any other activity which would constitute an offence under the UK market abuse regime) before the information is made public. This presentation may include management projections and certain other matters that may be considered “forward - looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the intent, belief or current expectations of the Companies and their management with respect to, among other things, future events and financial trends affecting the Companies. Forward-looking statements include, but are not limited to, statements regarding future events, plans, goals, objectives and expectations. The words “believes”, “expects”, “anticipates”, “estimates”, “plan”, “intend”, “likely”, “will ,", “should”, and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to expectations or other characterizations of future events or circumstances are forward-looking statements. Recipients are cautioned that any such management projections, estimates or other forward-looking statements are based on assumptions and estimates developed by management of the Companies, that any such forward-looking statements are not guarantees of future performance and that matters referred to in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Companies to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors, risks and uncertainties include, among other things, the impact of current or pending legislation and regulation, antitrust considerations, the impact of pending or future litigation or claims, changes in general economic conditions, fluctuations in interest rates, fluctuations in exchange rates, changes in industry conditions, changes in market conditions, changes in operating performance, changes in customers’ demand for the Companies’ products and services, changes in the level of competition, technological changes and innovations, changes in governmental regulations and policies and actions of regulatory bodies, changes in tax rates and changes in capital expenditure requirements. The information contained within this presentation has not been independently verified. No reliance may be placed, for any purpose whatsoever, on the information or opinions contained in this presentation nor on its completeness and no representation or warranty, express or implied, is given by or on behalf of any Company, or their respective directors, employees, agents or advisers as to the accuracy or completeness of the information or opinions contained in this presentation. The projections contained herein should not be regarded as a representation or warranty, express or implied, by any Company or their respective directors, employees, agents or advisors that the projected or estimated results will be achieved. To the maximum extent permitted by law, none of the Companies, their directors, officers, shareholders, advisors, employees or agents, nor any other person accepts any liability, including, without limitation, any liability arising out of fault or negligence for any loss arising from the use of the information contained in this presentation. This presentation speaks only as at the date on which it is made, Neither the delivery of this presentation nor any further discussions of any of the Companies with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Companies since that date and the Companies do not undertake any duty to update or to correct this presentation. The Information contained in this presentation is for information purposes only. The material and information herein is not to be shared with any other parties. The information contained in this presentation is not investment or financial product advice and is not intended to be used as the basis for making an investment decision. This presentation has been prepared without taking into account the investment objectives, financial situation or particular needs of any particular person. Certain market data information in this presentation is based on management’s estimate. Each Company obtained the industry, m arket and competitive position data used throughout this presentation from internal estimates and research as well as from industry publications and research, surveys and studies conducted by third parties. However, this information may prove to be inaccurate because of the method by which each Company obtained some of the data for its estimates or because this information cannot always be verified due to the limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties. 2
Today’s speakers Stephen Murdoch Chief Executive Officer Previously COO at Micro Focus Prior to joining Micro Focus, Stephen held senior executive positions in general management, sales, and strategy with IBM and Dell Has 25 years of experience in IT industry spanning hardware, software, and services Brian McArthur-Muscroft Chief Financial Officer Previously CFO at Paysafe led the business to listing in LSE Prior to Paysafe Finance Director at Telecity, led the IPO listing Also Interim CFO on the turnaround of MCI Worldcom EMEA Named as Business Week’s Finance Director of the Year in 2013 and again in 2017 Rob Ebrey Head of Tax and Treasury 13+ years of experience at Micro Focus Joined Micro Focus in 2006 as Group Financial Controller Head of Tax & Treasury since 2009 Graduated from Durham University with a Bachelors degree in Economics 3
Agenda: Transaction Overview Micro Focus Overview Company update Key Credit Highlights Financial Performance Overview Public Q&A 4
Executive Summary ■ Micro Focus is issuing a new $1,435m 7-year Term Loan B with proceeds used to refinance the existing $1,415m Term Loan B-2 due November 2021 ■ Leverage neutral transaction at 3.2x net leverage ■ The $500m RCF is also being extended to June 2024 ■ Pro forma weighted average maturity of 5.0 years (vs 3.5 years currently) ■ The transaction will be available to both new and existing lenders 5
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