UK enterprise application company Micro Focus is buying a Silicon Valley rival for $73.3m.

Micro Focus, based in Newbury, Berkshire, extends the life of legacy applications still in use at large corporations. NetManage is in a similar business - getting old applications to work as web-delivered software.

Micro Focus is offering $7.20 for each NetManage share - a 73 per cent premium on the firm's price of $4.15 at the close of trade on 30 April. The transaction depends on NetManage having a cash balance of at least $25m prior to the deal closing.

NetManage's board of directors has unanimously approved the takeover. It now needs approval from NetManage shareholders - it is hoped the deal will close in June 2008.

Micro Focus expects the deal to add to profits in the year ending 30 April 2009, excluding one-off integration costs.

Micro Focus said it will increase margins for NetManage's business to bring them into line with the rest of its business - it expects this process to cost $10m. ®

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