Hewlett Packard Enterprise is nearing a deal to sell its software division to Britain’s Micro Focus International, a person familiar with the matter said on Wednesday, as the U.S. Company focuses on serving large corporate customers.
The sale would help HP E CEO Meg Whitman execute a plan to shift HP E’s strategy to a few key areas such as networking, storage, and technology services since the company separated last year from computer and printer maker HP Inc.
HP E had been in talks with private equity firms to sell the unit for between $8 billion and $10 billion. HPE was reportedly in talks earlier this week with buyout firm Thoma Bravo to sell its software division. At the time, HPE had received offers for the software unit of as much as $7.5 billion in a sale process managed by investment bank Goldman Sachs Group.
The sale to Micro Focus, a multinational software company, is expected to be announced along with HP E’s latest quarterly earnings later on Wednesday, the source said. The source asked not to be identified because the deal is not yet public. HP E and Micro Focus declined to comment on the deal, which was first reported by Sky News.
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HP E acquired part of its software portfolio through the $10.3 billion purchase of Autonomy Corp. In 2011. HP‘s $11 billion purchase of Autonomy was supposed to form the central part of the U.S. Group’s move into software. The company later wrote off three-quarters of the British company’s value, accusing Autonomy executives of financial mismanagement.
Micro Focus, with a market capitalization of 4.45 billion pounds ($6 billion), has been bulking up on acquisitions to boost growth. The purchase of HP E’s software division would represent its largest to date.
In March, Micro Focus acquired Serena Software, a San Mateo, California-based company, for $540 million. Serena Software specializes in software that is used to manage the creation, deployment, and eventual end-of-life of the software applications used in businesses.
HP E’s other software assets include Vertica, a big data analytics platform; ArcSight, a cyber security firm; products for information technology operations management; and software from the $4.5 billion acquisition of Mercury Interactive in 2006.
HP E’s software unit generated $3.6 billion in net revenue in 2015, down from $3.9 billion in 2014. The company has said that software revenue growth has been challenged by a market shift toward cloud subscription services.
