Commenting on the acquisition, Meg Whitman, president and CEO at Hewlett Packard Enterprise, said: “We believe that the software assets that will be a part of this combination will bring better value to both our customers and shareholders as part of a more focused software company committed to growing these businesses on a stand-alone basis”.
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“Non-core” product families are to be spun off and merged with United Kingdom infrastructure software firm Micro Focus in a transaction valued at approximately $8.8 billion that will see HPE shareholders get a 50.1% ownership of the new combined company.
HPE had been in talks with private equity firms to sell the unit for between $8 billion (6.00 billion pounds) and $10 billion.
HPE Software’s product portfolio offers solutions in categories like IT operations management, software delivery and test, enterprise security, information management and governance, and Big Data analytics.
The deal is similar to HPE’s divestiture of its consulting services division in May, which it merged with CSC to form the third-largest IT services business in the world. Those assets are highly complementary to Micro Focus’ portfolio.
Micro Focus dealrepresents a rare opportunity to increase the scale of the British technology company.
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Together with Micro Focus, which in 2014 acquired Attachmate and is the owner of SUSE a Linux company, it will become of the largest pure-play software businesses in the world, with a sales force of close to 4,000. The company has said that software revenue growth has been challenged by a market shift toward cloud subscription services.
As the company continues its operational rejigs, HP expects the merger of its non-core software business as an important step in its strategy to unlock a faster growing, higher margin, stronger cash flow company. The company partnered with CSC, a former rival in the industry, for the deal.
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HPE will combine its Helion OpenStack and Stackato platforms with SUSE’s OpenStack experience through the partnership.
