Equity Research DAILY COMMENT

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1 Equity Research DAILY COMMENT OPENTEXT CORP. OTC-T/OTEX-US C$77.55/$74.38 November 05, 2013 Rating: BUY Target Price: $ Market Capitalization: $4,393.1M Risk Profile: MEDIUM COMPANY PROFILE OpenText develops and markets enterprise software that allows companies to organize and manage content and collaborate with business partners. The Company's enterprise information management (EIM) solutions are based on five portfolios of product offerings: enterprise content management (ECM), business process management (BPM), customer experience management (CEM), information exchange (IX) and Discovery. Open Text has ~5,300 employees and 31 country offices supporting products in 141 countries. PRICE CHART Source: Bigcharts.com REVISIONS Rating/Target Revised Prior Rating Unchanged Buy Target $ $87.00 F14E Revenue (in $M) $1,723.7 $1,501.7 F14E EBITDA (in $M) $492.0 $426.2 F14E adj. EPS $6.44 $5.92 FINANCIAL SUMMARY Last Price $74.38 Price Target $100.00, (+36.0%) Div/ Yield $1.20/1.6% 52-week Range $ S/O Basic (M) 59.1 S/O F/D (M) 59.4 Market Float (%) 98.0 Market Cap (M) $4,393.1 Net Debt (M) $66.8 Enterprise Value (M) $4,459.9 Avg. Weekly Vol. (M) 1.00 Fiscal YE 30-Jun TECHNOLOGY SOFTWARE Ralph Garcea, P.Eng, MBA Analyst Anuj Nijhawan Associate Chris Stringer Associate ACQUISITION OF GXS GROUP DOUBLING DOWN ON IX EVENTS OTEX entered into an agreement to acquire GXS Group (Private) for $1.165B (2.4x F2012 revenue, 8.0x F2012 adj. EBITDA) to be financed through $800M in debt, $265M in cash, and $100M of equity. The transaction is expected to close in 90 days subject to customary closing conditions. IMPLICATIONS Positive. OTEX has a history of successfully integrating acquisitions (Exhibit 3) and we believe that management s target to onboard GXS to the OTEX model within two years is conservative. With GXS, we could see F2015E revenue of $2.15B, adj. EBITDA of $601M, and adj. EPS of $6.91. We are increasing our target to $100 from $87. CATALYSTS Upcoming catalysts include the Enterprise World user conference in Orlando on November 17-21, Longer-term catalysts include traction from the new Red Oxygen product release, leverage from the GXS deal, as well as the potential for an increased dividend. VALUATION OTEX is currently trading at a C2014E EV/Sales of 3.0x and EV/EBITDA of 9.6x versus industry comparables at 4.0x and 11.7x, respectively. Thesis: With the growth of unstructured data in organizations, the need to manage content across multiple platforms and cloud services, and the increase in compliance-driven requirements, OpenText has developed industry-specific solutions that are critical for its Fortune 1000 clients. Being the largest independent ECM vendor, we believe the Company is well positioned in the segment and continues to win market share from the larger competitors. Forecasts F2012 F2013 F2014E F2015E F2016E Revenue ($M) $1,207.5 $1,363.3 $1,723.7 $2,145.2 $2,367.0 EBITDA ($M) $333.4 $408.6 $492.0 $600.7 $652.6 EPS (FD) $2.13 $2.51 $2.91 $3.46 $5.71 Adj EPS (FD) $4.61 $5.57 $6.44 $6.91 $7.85 CFPS $3.89 $6.08 $6.92 $8.87 $9.39 P/E 16.1x 13.3x 11.6x 10.8x 9.5x EV/Sales 3.7x 3.2x 2.6x 2.1x 1.9x EV/EBITDA 13.3x 10.8x 9.0x 7.4x 6.8x See back page for analyst certification and disclosures All figures in US$ unless otherwise noted.

2 ACQUISITION OF GXS GROUP DOUBLING DOWN ON IX OTEX entered into an agreement to acquire GXS Group for $1.165B (2.4x F2012 revenue, 8.0x F2012 adj. EBITDA) to be financed through $800M in debt, $265M in cash, and $100M of equity. The transaction is expected to close in 90 days subject to customary closing conditions. Management aims to onboard GXS to the OTEX operating model within two years and GXS to be accretive to adjusted earnings for F2014. At the end of FQ114, OTEX had $491M in cash and total debt of $558M. GXS GROUP GXS is a B2B Integration Services provider servicing a marquee customer base with over 50% of the Forbes Global GXS Trading Grid enables 550,000+ trading partners to integrate and manage business processes and transactions (over 14B per year) across global networks of customers, partners and suppliers. This allows customers to streamline new product launches, digitize accounts payable, automate warehouse receiving, conduct e-invoicing and e-payments, and increase global supply chain visibility. GXS is headquartered in Gaithersburg, Maryland, and has ~2,900 employees in 20 countries with 40 locations. GXS reported F2012 revenues of $487.5M and adj. EBITDA of $146.5M. GXS products and services include: GXS Trading Grid GXS Managed Services GXS cloud platform, the GXS Trading Grid, allows companies to share information, such as electronic product catalogues, inventory reports, purchase orders, shipment notices, invoices and remittance advices, using popular standards such as EDI and XML. GXS Managed Services enables customers to offload complex B2B e-commerce requirements to GXS, resulting in improved customer satisfaction, increased revenue and lower total cost of operations. The acquisition will allow OTEX to combine its Information Exchange (IX) portfolio of Managed File Transfer (MFT), Secure , FAX, Capture and EDI with GXS s portfolio of B2B integration services and managed services, which helps customers extend their partner networks to automate multi-enterprise processes and manage value-added commerce transactions. OTEX and GXS together expect to serve more than 80,000 customers and support ~16B annual transactions. EXHIBIT 1 GXS TRADING GRID DOUBLING DOWN ON IX Source: Company, GMCI 2

3 EXHIBIT 2 GXS PRODUCTS AND SERVICES AND CUSTOMERS Source: Company, GMCI 3

4 GXS ACQUISITION VALUE The total enterprise value of the transaction is $1.165B, valuing the deal at 2.4x GXS F2012 revenues, and 8.0x F2012 adj. EBITDA. OTEX will pay an aggregate of $1.065B in cash and $100M in OTEX common shares (in accordance with the terms of the Merger Agreement). In May 2012, OTEX acquired Easylink for $310M including debt (1.7x LTM revenues, 7.3x LTM EBITDA). Upon completion of the transaction, GXS stockholders will own ~ % of OTEX s outstanding common shares, assuming no changes to the number of common shares outstanding between the date hereof and the closing of the transaction other than the issuance of the share consideration. The transaction is expected to close during OTEX s FQ314 and is subject to customary regulatory approvals and closing conditions. EXHIBIT 3 OPENTEXT ACQUISITIONS Date Target Product Value incl. Net Debt ($M) January 09, 2003 Eloquent Inc Sales effectiveness solutions (LaunchForce ) - February 26, 2003 Corechange Inc Enterprise portal software for intranets - August 27, 2003 Gauss Interprise AG WCM for invoicing, ordering, and insurance claims $14.3 October 21, 2003 ixos Software AG Business optimization and /file system archiving $198.8 October 28, 2003 SER egovernment Deutschland German process-oriented document management - August 03, 2004 Artesia Technologies Inc Digital Asset Management (DAM) - August 31, 2004 Quest-Vista Plus Product Suite Vista Plus product suite carve-out $24.0 February 11, 2005 Optura Inc Business process optimization software $3.7 July 05, 2006 Hummingbird Ltd ECM solutions for U.S. government and legal companies $363.2 March 02, 2007 Momentum Systems Inc ECM solutions for U.S. government agencies $4.0 July 01, 2008 Spicer Corp-Division File format viewing solutions for ECM $11.7 July 02, 2008 emotion Inc Enterprise marketing asset management $5.0 September 04, 2008 Captaris Inc Enterprise Content Management (ECM) for fax $107.2 April 08, 2009 Vizible Corp 3D internet content transformation - May 06, 2009 Vignette Corp Web content management (WCM) $160.9 February 22, 2010 Nstein Technologies Inc Content and WCM solutions using semantic and text analysis $31.8 Aptil 26, 2010 Burntsand Inc ECM consulting and technology services $6.6 November 27, 2010 StreamServe Inc Business Communicaation solutions $71.0 February 02, 2011 Metastorm Inc BPM, BPA & EA software $182.0 March 08, 2011 wecomm Ltd Mobile apps - July 13, 2011 Global 360 Inc Process and case management solutions $260.0 September 06, 2011 Operitel Corp Learning portal solutions - May 01, 2012 EasyLink Services Intl Corp Cloud-based electronic messaging & business integration $307.7 March 06, 2013 Resonate KT Ltd Data visualization software - July 31, 2013 ICCM Solutions BPM technology partner $18.9 August 16, 2013 Cordys BPM and Case Management $33.0 November 5, 2013 GXS Group Inc Cloud based B2B ecommerce and integration services $1,165.0 Source: Company, GMCI 4

5 EXHIBIT 4 GLOBAL SOFTWARE COMPARABLES Local Price Div. Mkt. Cap. Revenue (USD) P/E EV/Sales EV/EBITDA GLOBAL SOFTWARE Ticker 4-Nov Target Yield (US$M) C13E C14E C13E C14E C13E C14E C13E C14E Opentext Corp OTC-T % 4,238 1,382 1, Microsoft Corp MSFT-US % 300,026 81,110 86, Oracle Corp ORCL-US % 153,978 37,990 39, Sap Ag SAP-XE % 96,018 23,439 25, Vmware Inc VMW-N ,049 5,191 5, Adobe Systems Inc ADBE-US ,689 4,069 4, Salesforce.com Inc CRM-N ,789 3,943 5,081 NMF NMF NMF NMF Symantec Corp SYMC-US % 15,946 6,715 6, Dassault Systemes Sa DSY-FR % 15,103 2,879 3, Ca Inc CA-US % 14,378 4,533 4, Citrix Systems Inc CTXS-US ,804 2,924 3, Red Hat Inc RHT-US ,167 1,485 1, Autodesk Inc ADSK-US ,397 2,259 2, Netsuite Inc N-N , NMF NMF NMF NMF NMF NMF Ansys Inc ANSS-US , Verisign Inc VRSN-US , , The Sage Group Plc SGE-LN % 5,927 2,224 2, Concur Technologies Inc CNQR-US , NMF NMF NMF NMF Informatica Corp INFA-US , , Tibco Software Inc TIBX-US ,946 1,075 1, Ptc Inc PMTC-US ,330 1,299 1, Qlik Technologies Inc QLIK-US , NMF NMF NMF NMF Software Ag SOW-XE % 3,272 1,360 1, Compuware Corp CPWR-US % 2, , Manhattan Associates Inc MANH-US , Progress Software Corp PRGS-US , Pegasystems Inc PEGA-US % 1, Microstrategy Inc MSTR-US , NMF NMF Source: Thomson One, Price Targets are consensus except for OTC-T Mean excl. OTC-T 22.1x 19.6x 4.4x 4.0x 13.2x 11.7x Mean 21.7x 19.3x 4.3x 3.9x 13.1x 11.6x Median 23.1x 19.5x 3.6x 3.4x 11.7x 10.5x 5

6 RESEARCH DISCLOSURES Analyst Certification The Global Maxfin Capital Inc ( GMCI ) research analyst whose name appears on the front page of this research report hereby certifies that (i) the recommendations and opinions expressed in the research report accurately reflect the research analyst s personal views about the company and the securities that are the subject of this report and all other companies and securities mentioned in this report and (ii) no part of the research analyst s compensation was, is, or will be directly or indirectly, related to the specific recommendations or views expressed by the research analyst in this report. Analyst Ethics As a condition of employment, analysts are required to adhere to the Code of Ethics and Standards of Professional Conduct of The CFA Institute. Analyst Trading GMCI permits analysts to own and trade in the securities and/or derivatives of those companies under their research coverage, subject to the following restrictions. No trades can be executed in anticipation of the initiation of coverage or a change in recommendation, until 48 hours after the dissemination of such information to our clients. A transaction against an analyst s recommendation can only be executed for a reason unrelated to the outlook for the stock and with the prior approval of the Chief Compliance Officer. Conflicts of Interest The research analyst and/or associates who prepared this report are compensated based on the overall profitability of GMCI, which includes the overall profitability of investment banking and related services. In the normal course of its business, GMCI or its affiliates may provide financial advisory and/or investment banking services for the issuers mentioned in this report in return for remuneration and may seek to become engaged for these services from any of the issuers mentioned in this report. GMCI may buy from or sell to customers the securities of issuers mentioned in this report on a principal basis. GMCI, and/or its respective officers, directors or employees may from time to time acquire, hold or sell the securities discussed herein or in related securities or in options, futures or other derivative instruments based thereon. Dissemination of Research GMCI uses its best efforts to disseminate its equity research to all clients on a timely and effective basis in electronic form, via fax, mail and through its website ( Please contact your GMCI representative for more information. Equity Research Rating System The rating system is based on the stock s expected absolute total return over the next 6 to 12 months. STRONG BUY is expected to produce a total return of 25% or more, BUY a total return of 10% to 25%, HOLD a total return of 0% to 10%, and SELL a negative total return. The risk rating is a summary measure of the authoring analyst's subjective assessment of the underlying fundamental risks of the issuer and the business environment in which it operates. In general, we regard large capitalization stocks with a consistent dividend history as being at the low end of the risk continuum and small capitalization early stage companies as speculative. Our rating system has four categories: LOW, MEDIUM, HIGH and SPECULATIVE. 6

7 General Disclosures The opinions, estimates and projections contained in this report are those of GMCI as of the publication date of this report and are subject to change without notice. GMCI endeavours to ensure that its research reports are compiled or derived from sources that it believes are reliable and contain information and opinions that are accurate and complete. However, GMCI makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions contained herein and accepts no liability whatsoever for any loss arising from any use of, or reliance on, this report or its contents. This report is not to be construed as an offer or solicitation to buy or sell any security. Applicable Disclosures for Issuer (Open Text) (Yes / No ): OTEX-US 1) As of the end of the month immediately preceding the date of issuance of this research report or the end of the second most recent month if the issue date is less than 10 calendar days after the end of the most recent month, GMCI and its affiliates collectively beneficially own 1% or more of any class of the issuer's equity securities. 2) The authoring analyst and/or an associate of the analyst are long/short in any of the issuer s securities directly or through derivative. 3) A GMCI partner, director or officer has provided services to the issuer for remuneration during the preceding 12 months other than investment advisory or trading services. 4) GMCI has provided investment banking services for the issuer during the 12 months preceding the date of issuance of the report. 5) List name(s) of any partner, director, officer, employee or agent of GMCI, who is also an officer, director or employee of the issuer. 6) The authoring analyst has visited the material operations of the issuer. 7) The authoring analyst received reimbursement for travel expenses. Distribution of Recommendations Strong Buy Buy Hold Sell Under Review Suspended The particulars contained herein were obtained from sources, which we believe to be reliable, but are not guaranteed by us and may be incomplete or inaccurate. The opinions expressed are based upon our analysis and interpretation of these particulars and are not to be construed as a solicitation or an offer to buy or sell the securities mentioned herein. GMCI may act as financial advisor, fiscal agent or underwriter for certain of the companies mentioned herein, and may receive remuneration for its services. GMCI and/or its principals, officers, directors, representatives, associates may have a position in the securities mentioned herein and may make purchases and/or sales of these securities from time to time in the open market or otherwise. This report may not be reproduced in whole or in part, or further distributed or published or referred to in any manner whatsoever nor may the information, opinions or conclusions contained herein be referred to without in each case the prior written consent of GMCI. 7

8 CORPORATE DIRECTORY Equity Research Ralph Garcea, P. Eng, MBA Managing Director, Head of Equity Research Tel: (647) Anuj Nijhawan Equity Research Associate Tel: (647) Institutional Sales & Trading Fabiene Evans, CPA, CA Managing Director, Head of Institutional Sales Tel: (416) Steve Duenkler, CFA Managing Director, Head of Institutional Trading Tel: (416) Chris Stringer Equity Research Associate Tel: (647) Investment Banking Dean McPherson, MBA, CFA Managing Director, Head of Investment Banking Tel: (647) Electronic Trading Steve Burns Vice President, Electronic Trading Tel: (647) Kent Learoyd Vice President, Electronic Trading Tel: (647) Bay Street, Suite 800 Toronto, ON M5H 2S6 8