MCRO LN

Micro Focus International PLC

TMT, Event Driven/Special Sit


Presented:05/31/2017
Price:£23.94
Cap:$0.00B
Current Price:£5.32
Cap:$2.77B

Presented

Date05/31/2017
Price£23.94
Market Cap$0.00B
Ent Value$0.00B
P/E Ratio45.03x
Book Value£5.65
Div Yield0.02%
Shares O/S0.00M
Ave Daily Vol1,178,586
Short IntN/A

Current

Price£5.32
Market Cap$2.77B
Micro Focus International Plc engages in the provision of software that allows companies to develop, test, deploy, assess, and modernize business-critical enterprise applications. It operates through the Micro Focus Product Portfolio and SUSE Product Portfolio segments. The Micro Focus Product Portfolio segment comprises of host connectivity, identity, access and security, development and information technology operations management tools, and collaboration and networking. The SUSE Product Portfolio segment involves in providing and supporting enterprise-grade linux and open source solutions. The company was founded in 1976 and is headquartered in Newbury, United Kingdom.

Publicly traded companies mentioned herein: Hewlett Packard Enterprise Co (HPE), KKR & Co LP (KKR), Micro Focus International plc (MCRO LN)

Highlights

The presenter is long shares of London-listed Micro Focus (MCRO LN; £5.5 billion market cap), which as of early September 2016 is set to merge with ~$8.8 billion of assets from HP Enterprise software. The business is interesting to the presenter because pre-deal, MCRO was the 23rd largest software company in the world, and when the deal closes the pro forma company will be the 7th largest, with ~2x the revenue it generates today. In addition, MCRO’s track record of earnings growth and M&A integration is excellent. He views the management team as “A+” and said they are among the best in the industry when it comes to integration/ cost cutting; additionally, Chris Hsu, who was a managing director at KKR before joining HPE in 2014, will lead the new company (as CEO) when the deal is completed and he is highly regarded. While shares are likely to be volatile heading into earnings, any weakness is likely a buying opportunity.

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Idea Discussion

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