Hewlett Packard Enterprise Co. (HPE) Wednesday announced its plan to spin-off and merge its non-core software operations with Britain's Micro International PLC in an $8.8 billion deal, as the company continues to streamline its operations.
HP Enterprise will receive $2.5 billion in cash, while its shareholders are expected to own 50.1 percent or about $6.3 billion of Micro Focus stock.
Last fall, Hewlett-Packard Co. separated into two independent companies - Hewlett Packard Enterprise Co. (HPE) and HP Inc. (HPQ) - in an effort to curb costs improve its sluggish sales.
Hewlett Packard said the merger will "accelerate its strategy to unlock faster-growing, higher-margin and stronger free cash flow company ."
The company also reported an increase in third-quarter profit, driven largely by gain on H3C divestiture.
Profit for the quarte rose to $2.27 billion or $1.32 per share, up from $224 million or $0.13 per share last year. Adjusted earnings were $0.49 per share, up from $0.45 per share last year. Revenues for the quarter dropped to $12.21 billion from $13.06 billion last year.
In May, the company completed a $2.3 billion deal in China to sell a 51 percent stake in H3C joint venture.
"As we said in the Enterprise Services announcement last quarter, both software and services remain key enablers of our go-forward strategy, and we are focused on building the right portfolio to win in our target markets. We believe the portfolio changes we've made over the past year are setting up HPE for long-term success while unlocking tremendous value for our shareholders," said Meg Whitman.
HPE closed Wednesday's trading at $22.09, up $0.23 or 1.05%, on the NYSE. The stock, however, dropped $0.69 or 3.12% in the after-hours trade.
by RTTNews Staff Writer
For comments and feedback: firstname.lastname@example.org