Adam Gutkin – Open Text Corporation
Adam Gutkin enjoys a challenge, but after leading a dozen-plus acquisitions totaling more than $5 billion over the last six years, it takes a lot to faze him.
So when his employer, OpenText, a global information management provider headquartered in Waterloo, Ontario, decided to acquire Micro Focus, a company that delivers enterprise software for digital transformations, for $5.8 billion in the summer of 2022, he was game to help lead the acquisition. The deal nearly doubled the size of OpenText.
As vice president, legal mergers and acquisitions at OpenText, Gutkin took charge of educating senior executives on the process they’d have to go through to acquire Micro Focus—and it wouldn’t be easy.
“We know how to do acquisitions, having completed over 70 in our company history, but this was unique in that we were acquiring a U.K. publicly listed company,” Gutkin says. “The process in the U.K. is very different. Everything from due diligence to the deal negotiations to the actual process to complete the acquisition.”
In the U.K., there’s no need for companies to negotiate terms; most deals are essentially dictated by statute. That country also has a formal regulatory panel that oversees most aspects of the deal (even before it’s announced). And the diligence process is different: The companies hammer out certain key aspects through in-person meetings with senior management.
“The challenge was kind of twofold: supporting our leadership internally so they understood the unique deal dynamic, but also making sure that we went through our internal governance process and checked off all the boxes that we needed to give us the conviction to do the deal,” Gutkin says.
A major acquisition across the pond
Born from a partnership between the University of Waterloo and Oxford University to build the first online Oxford English Dictionary in 1991, OpenText has grown exponentially in recent years. After closing on the Micro Focus acquisition in early 2023, it had over $6 billion in annual revenue and has more than 24,000 employees in over 60 locations across the globe, making it Canada’s largest software and cloud company and the seventh largest pure-play software company in the world.
As companies worldwide undergo digital transformations that include moving their business and IT operations to the cloud, OpenText is well-positioned to capitalize on that trend. In 2013, the company was doing about $180 million in cloud revenue annually. Today, it has surpassed $1.5 billion in cloud revenue.
“So, we have gone through that cloud journey with our customers and are familiar with how that looks,” Gutkin says. “We believe that there’s a significant growth opportunity to further uplift Micro Focus customers to the cloud, just as we have done for our customers.”
Micro Focus may be behind OpenText in terms of its transition to the cloud, but it brings a lot to the table: a unique customer base, strong cash flows, a leadership position in strategically important markets as well as AI and analytics capabilities.
Once OpenText decided to go ahead with the acquisition, it was up to Gutkin to work within the bounds of the U.K. Takeover Code. He also consulted with the U.K. Takeover Panel on a regular basis.
“They have to sign off on a number of things, including the terms of any potential agreement, and you have to keep them informed throughout the process,” Gutkin says. “So that’s very different than what we’re used to in the U.S.”
Seeking complementary opportunities
Gutkin was also involved in OpenText’s 2019 acquisition of Carbonite, a data protection, backup, disaster recovery and endpoint security company. Carbonite’s subscription products are primarily cloud-based, and according to Gutkin, that accounted for its appeal to OpenText.
The acquisition also brought OpenText a small- to medium-sized business customer base, where it had previously been focused on enterprise customers.
“We seek opportunities that complement our current product portfolio, extend our customer set and increase our scale and market presence,” Gutkin says. “We’ve completed a number of acquisitions over the years of companies that are primarily cloud companies. Carbonite is an example of an acquisition that… was almost entirely cloud revenue.”
For Carbonite, as for other acquisitions, Gutkin’s team was involved in all aspects of the process, from negotiating NDAs with potential targets to conducting due diligence, negotiating deal terms, closing deals and handling post-closing integration.
Once merged, the two companies offered OpenText customers a cloud-based platform with data protection, endpoint security, digital forensics and intrusion detection capabilities—a major draw in an era when data security is paramount.
Finding a calling in acquisitions
A 2005 graduate of York University, Gutkin, the son of two lawyers, had originally wanted to pursue medicine. He even worked for a hepatologist, or liver specialist, during summers as an undergrad, publishing original research in various medical journals.
But during a post-graduation year off, Gutkin took some time to reflect, and found himself thinking that medicine was not his passion. He gradually came to realize that corporate law had long fascinated him.
“The chance to be involved in acquisitions that show up in the Globe and Mail, or whatever your national newspaper is, and to help companies grow and transform, seemed like a unique opportunity,” Gutkin says. “I just thought it would be interesting to be behind the scenes in that process.”
He took the LSAT, gained admission to several law schools and decided to give the legal field a shot, “and I haven’t looked back since,” he says.
After earning his J.D. from Western University in 2009, Gutkin worked as an associate at Osler, Hoskin & Harcourt in 2010, spending some time on a secondment with Tim Hortons starting in 2013 and subsequently working on the $12 billion Burger King-Tim Hortons merger. In September 2016, he joined OpenText as legal counsel for mergers and acquisitions.
“It’s very much been an MBA on the job, in many respects,” Gutkin says. “The legal M&A function is viewed as a key partner on the corporate development team, and an important partner in OpenText’s M&A machine.”
Next up for Gutkin: more acquisitions, of course.
“With the additional swim lanes we now have through the Micro Focus acquisition,” he says, “I expect we will be very busy, as there is a lot of green space for us to pursue.”
View this feature in the Vanguard Spring III 2023 Edition here.
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