With this move, the US company will slim down its overall operations and shift focus to other key business operations.
Advertisement
Micro Focus dealrepresents a rare opportunity to increase the scale of the British technology company.
The combined entity will have annual revenues of 4.5 billion United States dollars (£3.4 billion), creating one of the biggest software firms in the UK. Micro Focus also said its SUSE unit will launch a new partnership with HPE, becoming the American firm’s preferred Linux partner. Moreover, this will leverage their business logic and date, alongside next-gen technologies to innovate in novel ways.
With the deal, HPE frees itself of the last of its $11 billion acquisition of British software maker Autonomy Corp. The purchase was supposed to form the nucleus of HPE’s move into software. An HPE senior executive will serve on the board of directors of the combined company and HPE will nominate 50 percent of the independent directors to the combined company’s board. The UK tech sector will no doubt snap overwhelming overseas interest. The merger with HPE Software gives the company a significant boost in the infrastructure software market. Micro Focus replaced ARM in the top 100 after it was sold to a Japanese firm earlier this year. REUTERS/Dylan MartinezHewlett Packard Enterprise Co (HPE) will spin off and merge its non-core software assets with Britain’s Micro Focus International Plc in a deal worth $8.8 billion, the companies said on Wednesday.
The company on Wednesday said that it is to get a US$2.5 billion cash payment and its shareholders are to hold a 50.1 percent stake in the new combined company. The spin-off will operate under the name Micro Focus and will be run by its executives. HPE said it will pay $700 million in one-time costs related to the separation of the assets. The deal is expected to be tax-free.
“(It) is entirely consistent with our established acquisition strategy and our focus on efficient management of mature infrastructure products”, he told reporters on a conference call from NY.
Started in 1976 it now employs more than 4,500 people across 80 global locations, with around 20,000 customers worldwide.
The company expects full-year earnings in the range of $1.90 to $1.95 per share.
Micro Focus shares surged as much as 23%.
Advertisement
The deal with Micro Focus, a multinational software company based in Newbury, United Kingdom, was announced along with HPE’s latest quarterly earnings. Revenue declined 6% from year-ago levels to $12.2 billion, missing the Street view by around $420 million.
