“Spin Merger” creates huge UK standalone enterprise software firm.
In what marks one of the biggest overseas takeovers by a British company, Micro Focus is to merge with HPE’s Software Business in a deal worth an estimated $8.8bn.
The ‘spin-merge’ will see Micro Focus acquire the non-core software assets of HPE, with HPE shareholders taking a 50.1% share in the merged company. The software assets in the deal include HPE's Application Delivery Management, Big Data, Enterprise Security, Information Management & Governance and IT Operations Management businesses.
The deal includes what's left of Autonomy, the UK firm co-founded by Mike Lynch, bought by HP in October 2011, which remains highly controversial and is the subject of a court case due to take place in the UK in 2018..
Micro Focus is one of the UK’s biggest technology companies on the FTSE 100, recently replacing chipmaker ARM following its acquisition by Japan’s Softbank. Micro Focus has made a number of big buyouts in recent times. In 2014, it bought software group Attachmate for $1.2bn and earlier this year bought Serena Software for $540m.
Micro Focus and HPE Software will combine the portfolios to create one of the world’s largest pure-play infrastructure software companies.
Kevin Loosemore, Executive Chairman, Micro Focus, said: “Today’s announcement marks yet another significant milestone for Micro Focus and is wholly consistent with the long-term business strategy we have been pursuing to be the most disciplined global provider of infrastructure software.
"The proposed merger with HPE Software is consistent with our recent acquisitions of Serena Software and the Attachmate Group. The combination of Micro Focus with HPE Software will give customers more choice as they seek to maximise the value of existing IT assets, leveraging their business logic and data along with next-generation technologies to innovate in new ways with the lowest possible risk.”
This is not the first sale of HPE assets this year; in May HPE announced the spin-off and merger of its Enterprise Service business with CSC.
"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, President and Chief Executive Officer of HPE.
The deal with Micro Focus is expected to close in Q3 2017.