HPE Reveals Plans to Release their Non-Core Software Assets to Micro Focus in a Deal Worth £6.6bn

Meg Whitman Micro Focus

UK tech firm Micro Focus has announced plans to plan to buy HPE’s non-core software business in a deal worth £6.6bn.

This is the latest in a recent spate of acquisitions which have seen Micro Focus’ value skyrocket to over £5bn, with revenue doubling in 2015.

Kevin Loosemore, Micro Focus executive chairman, said: “Today’s announcement marks another significant milestone for Micro Focus.”

Mr Loosemore said he approached Hewlett-Packard in February about a deal and was not put off by the market turbulence that followed the Brexit vote in the UK.

Meg Whitman, CEO of HPE announced in a recent blog post the company’s plans to double down on delivering software-defined hybrid IT solutions. 

In her blog, Meg Whitman, said:

“Today we announced plans for the spin-merge of our non-core software assets with Micro Focus. The combination of HPE’s Application Delivery Management, Big Data, Enterprise Security, Information Management & Governance and IT Operations Management businesses with Micro Focus will create one of the world’s largest pure-play software companies. 


“Micro Focus’ approach to managing both growing and mature software assets will ensure higher levels of investment in growth areas like big data analytics and security, while maintaining a stable platform for mission-critical software products that customers rely on.


“Because of this, I believe that the software assets that will be a part of the combined company will bring better value to our customers, employees and shareholders as part of a more focused software company.”

Ms Whitman outlined the deal as an exciting time for HPE as a key stage in the execution of a larger strategy to better focus their efforts on delivering industry-leading service to their customers. Ms Whitman added:

“I want to be crystal clear – HPE is not getting out of software. Software is still a key enabler of our go-forward strategy, but we need the right assets to win in our target markets. Moving forward, we will double down on the software capabilities that power and differentiate our infrastructure solutions and are critical in a cloud environment. 


“I am confident that we are making the right choices. Once the ES–CSC and Software–Micro Focus transactions are complete, HPE will be a faster-growing, higher-margin and stronger free cash flow company, well positioned for the future.”

In her blog, Ms Whitman outlined how please she is with HPE’s strategy so far, detailing recent customer wins with Home Depot, Best Buy, DropBox and Rio Airport.

HPE’s market cap has increased by over $10 billion (40%) since the seperation from HP Inc on November 1st 2015.

Ms Whitman ended her statement by saying:

“As I’ve said many times before, we’re living in a world where continuous improvement is essential to long-term success. I am pleased with the progress we’ve made, and am excited about the opportunity ahead.”

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