Micro Focus makes play to buy Relativity Technologies

Software vendor unveils $9.7m bid for application modernisation specialist

UK-based enterprise applications vendor Micro Focus is vying for leadership of the fragmented application modernisation space after acquiring Relativity Technologies.

The bullish firm, which claims it has a strong track record for rapidly integrating acquired companies, will pay $9.7m (£6.5m) for its US-based rival – adding to its recent conquests of NetManage and Liant Software.

Micro Focus recently said it expected to report revenues of $135m for the six months to 31 October, up from $108.9m a year earlier, with EBITDA margin expected to exceed 40 per cent.

The London-listed vendor said Relativity would bolster its position in the application modernisation sector, which it claimed was both fast-growing and still “highly fragmented”.

Stephen Kelly, chief executive at Micro Focus, said: “In this tough macroeconomic environment, chief executives are crying out to slash IT costs. Application modernisation projects – which provide payback in weeks – answer that call.

“The acquisition of Relativity is consistent with Micro Focus’s strategy of acquiring companies that complement our core areas of expertise and where significant synergies can be derived.”

The transaction, which has been unanimously approved by Relativity’s directors, is set to close before the end of this year.