Hewlett Packard Enterprise is nearing a deal to sell its software division to Britain’s Micro Focus International, a person familiar with the matter said on Wednesday, as the USA company focuses on serving large corporate customers. With this move, the USA company will slim down its overall operations and shift focus to other key business operations. HPE shareholders will meanwhile hold a 50.1% stake in the combined company valued at around US$6.3 billion. The combined firm will be led by Kevin Loosemore, executive chairman of Micro Focus.
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The deal is expected to close by the second half of HPE’s fiscal year 2017.
The deal would bring an end to HP’s ill-fated 2011 acquisition of British software maker Autonomy Corp for $11 billion in 2011.
Hewlett-Packard Co. past year split into two companies, with Hewlett Packard Enterprise selling commercial tech products and services, while HP Inc., focuses on personal computers and printers.
With the Micro Focus and CSC deals, Whitman said, HPE “will be a faster-growing, higher-margin and stronger free cash flow company, well positioned for the future”.
HPE will also receive a $2.5 billion cash payment prior to the completion of the merger, resulting in total consideration to HPE and its shareholders of approximately $8.8 billion. According to Mik Kersten, CEO of Tasktop Technologies, which partners closely with HPE Software on tools, those next-generation technologies include tools and software to support Agile development methods and DevOps practices.
Micro Focus International plc (MCFUF.PK, MCRO.L) and Hewlett Packard Enterprise ( HPE ) announced a definitive agreement pursuant to which Micro Focus has agreed to acquire HPE’s software business segment.
Micro Focus shares surged as much as 23%.
HPE is in the process as well of doubling down in order to deliver a new group of modern, multi-cloud software that is infrastructure as a service oriented.
“The proposed merger with HPE Software is consistent with our recent acquisitions of Serena Software and the Attachmate Group”. The new combined entity will also have a robust go-to-market capability, thanks to its deep R&D resources and almost 4,000 sales people worldwide.
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Hewlett also said it will rely upon Micro Focus’s “SUSE” Linux as its preferred distribution of Linux.
