Micro Focus, headquartered in Newbury, said the proposed deal with HPE Software is a “rare opportunity” to significantly increase Micro Focus’ scale and breadth. It is also a relatively rare example of a British company buying US technology assets. The firm claims the duo’s portfolios are “highly complementary” and create one of the world’s largest pure-play software companies.
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Its shares have risen by 60 per cent over the past year and it replaced software company ARM on the index last week.
The combination of both Micro Focus and HPE Software’s technology will give customers new choices as they look to maximize the value of existing IT assets and leverage business logic and data along with next-generation technologies, said Livesey.
HPE will be retaining tools that support the company’s cloud and infrastructure businesses but will be spinning off tools for application delivery management, big data, enterprise security, information management, governance and IT operations management.
Micro Focus was promoted to the FTSE 100 last week, replacing ARM after it was bought by Japan’s Softbank.
The sale will mean two-thirds of HPE’s remaining business will be hardware, which is fast becoming a commodity, UBS’s Milunovich said. HPE will retain a 50.1-percent ownership in the company.
The software spinoff was announced at the same time HPE reported better-than-expected earnings in its fiscal third-quarter. It will be one of the largest takeovers by a British company in recent years.
According to the terms of the deal, Micro Focus will pay $2.5 billion in cash to HPE.
As The Wall Street Journal reports, the assets it is shedding include the former operations of Autonomy Corp., a British software maker acquired in 2011 for $11 billion “in a deal widely regarded as a mistake”.
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.
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Cisco, meanwhile, is missing the storage assets needed to win in the current hyperconverged market where storage, compute and networking assets are critical to success, said Whitman.
