HP Enterprise to spin off non-core software assets

AFP

Hewlett Packard Enterprise announced plans to spin off its non-core software assets, to be merged with British software group Micro Focus.
The deal creates an entity valued at $8.8 billion which will be “one of the world’s largest pure-play enterprise software companies,” according to HPE.
“With today’s announcement, we are taking another important step in achieving the vision of creating a faster-growing, higher-margin, stronger cash-flow company well-positioned for our customers and for the future,” said Meg Whitman, chief executive of HPE.
The move comes after the breakup of computer giant Hewlett Packard last year into two companies: software and services HPE and computer and printer maker HP Inc.
Under the deal, HPE shareholders will get 50.1 percent ownership of the new combined company and a $2.5
billion cash payment.

Tech sector in shakeup
The deal is the biggest announced purchase of a foreign target by a British firm since voters opted to quit the European Union in June.
“The merger will create one of the world’s largest infrastructure software companies with leading positions across a number of key products,” Micro Focus chairman Kevin Loosemore said.
Other headline-grabbing takeovers recently have included Microsoft’s $26-billion acquisition of social media company LinkedIn, and US cyber security leader Symantec’s $4.65-billion purchase of Blue Coat Inc.
Separately Wednesday, Intel announced plans to spin off its cyber security operations as an independent company under the name McAfee, as the US giant also sought to offload non-core operations.
“The tech sector is going through a rapid phase of consolidation. Tech is leading (the) deal market this year — as it did in 2015,” ETX Capital analyst Neil Wilson said.
“The pace of tech deals is the second fastest ever after 2000, while the number of deals across the rest of the market is down.”