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OpenText Expands Share Repurchase Program

OpenText™, a leader in information management software, has announced a significant increase in its share repurchase initiative. The company has raised its previously disclosed Fiscal 2025 normal course issuer bid (NCIB) by $150 million, pushing the total authorized share repurchase amount to a remarkable $450 million.

This decision reflects the firm’s confidence in its operational model and its ongoing commitment to enhancing shareholder value. According to Mark J. Barrenechea, OpenText’s CEO and CTO, the share repurchase program is a pivotal part of the company's capital allocation strategy, allowing OpenText to invest in itself while simultaneously returning value to its shareholders. He emphasized the strength of the business and the ability to generate robust margins and cash flow, which underpin this elevated repurchase limit.

The share repurchase program will remain active for a 12-month period starting from August 7, 2024, aiming to complete the purchases by August 6, 2025, although it could be terminated sooner if the maximum purchase limits are hit early. The company has already bought approximately 8.9 million common shares for about $258 million since the commencement of the NCIB.

Furthermore, to streamline the share repurchase process, OpenText has established an automatic share purchase plan (ASPP) with its broker. This plan allows the company's broker to execute share purchases at its discretion within the guidelines set forth, even during times when OpenText would typically be restricted from buying shares. With the ASPP in place, OpenText can effectively manage and facilitate these repurchases during various market conditions.

The introduction of the ASPP ensures that all purchases under this program count toward the total number of shares repurchased under the NCIB. Importantly, this automatic purchase mechanism is already pre-approved by the Toronto Stock Exchange (TSX) and is set to be effective starting March 14, 2025.

OpenText is optimistic about its future, particularly with the newly established higher limits reflecting a strategic focus on long-term growth and shareholder interest. Despite general market volatility, the company remains dedicated to maintaining strong financial health and delivering consistent value to its investors.

In terms of execution, shares will be repurchased through open market transactions on various exchanges, including the TSX and NASDAQ. The criteria for repurchasing shares will align with the applicable regulations and the established rules of the stock exchanges involved.

OpenText's strategic moves, including this expansive share repurchase initiative, establish a solid foundation for its business strategy and reinforce commitment to a shareholder-first approach in its investment decisions. This is clearly laid out by the underlying assumptions guiding these forward-looking statements: a belief in sustained operational effectiveness and profit generation, which ultimately leads to a meaningful return on investment for shareholders.

As OpenText navigates the complexities of the information management landscape, this capital allocation strategy exemplifies their proactive approach in ensuring the company not only thrives but continues to reward its investors. Shareholders can look forward to the positive implications of this expanded repurchase program as it rolls out in the upcoming months.