Last fall, Hewlett-Packard Co. separated into two independent companies – Hewlett Packard Enterprise Co.
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The company also said Wednesday it would spin off and merge some of its non-core software assets with United Kingdom -based Micro Focus International Plc in a transaction valued at $8.8 billion, including a $2.5 billion cash payment to Hewlett Packard Enterprise.
As part of that process, Whitman a year ago split HP’s operations focused on selling business technology products from its personal computer and printer operations. Palo Alto-based HPE and Micro Focus will combine software products in application delivery management, big data, enterprise security, information management and governance, and IT operations management. In the third quarter, HPE reported net revenue of $12.2bn, down 6% from $13.1bn a year earlier. The move, which is expected to close in the third quarter of HPE’s fiscal 2017, will make once humble Micro Focus into a market leader. HPE shareholders however will still retain 50.1 per cent of the combined company that will operate using the name Micro Focus and be run by its executives. Selling these assets to Micro Focus signals an end to HPE’s Autonomy saga.
HPE had been considering a sale of some of those software assets at least since July, according to people familiar with the matter.
HPE acquired part of its software portfolio through the $10.3 billion purchase of Autonomy Corp.in 2011.
HPE has an ongoing fraud suit against the chief executive of the company Tom Lynch and its chief financial officer Sushovan Hussain over claims that they overvalued the company.
The former Hewlett-Packard, which split into HP Inc. and HPE past year, built its enterprise software offerings through acquisitions such as the purchase of United Kingdom software company Autonomy, which cost more than $10 billion and led to accusations of fraud.
While executing key changes to our portfolio, we delivered earnings at the top of our guidance range, delivered about $1 billion in free cash flow, returned more than $1.5 billion to shareholders, and improved margins in both Enterprise Group and Enterprise Services. The HPE – Micro Focus tie-up is its largest deal to date.
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In addition to the software assets deal, the pair are also planning a commercial partnership to bolster development in areas such as cloud computing, Micro Focus said.
