A firm bought assets from Hewlett Packard Enterprise. Its CEO has now quit and shares are tanking

U.K.-based @MicroFocus said it now expects revenue to fall between 6 and 9 percent for the twelve months ending October 31, 2018. Its CEO @ChrisHsu quit the London Stock Exchange-listed company to "spend more time with his family and pursue another opportunity." Micro Focus bought @HPE's software assets last year for $8.8 billion.

Shares of a software company that bought assets of Hewlett Packard Enterprise (HPE)toppled more than 50 percent on Monday after the company cut its revenue forecast and its chief executive resigned.

U.K.-based Micro Focus International said it now expects revenue to fall anywhere between 6 and 9 percent for the twelve months ending October 31, 2018, significantly lower than the 2 to 4 percent decline it predicted in its interim January results.

This was due largely to "one-off transitional effects" of the firm's $8.8 billion takeover of HPE's software assets last year, and issues associated with the implementation of a new IT system, Micro Focus said. HPE was formed in late 2015 as a result of the split of HP into two companies. But before that another British software firm, Autonomy, was sold to Hewlett Packard in 2011 with the $11.1 billion sale later being enshrouded by a legal dispute. Then in 2017, Micro Focus International bought HPE's software assets for $8.8 billion which included Autonomy.

The little-known U.K. company, which provides software and consultancy, has made a number of historical acquisitions. It bought Borland Software in 2009 for $75 million, Attachmate in 2014 for $1.2 billion and Serena Software in 2016 for $540 million.

Kevin Loosemore, executive chairman of Micro Focus International, said the company remained confident in its strategy despite disappointing short-term performance and outlook.

"I would like to thank Chris Hsu for his leadership, tireless energy and enthusiasm over the past 15 months and wish him well in his new venture," Loosemore said in a statement Monday.

"Chris was instrumental in achieving the carve out of the HPE Software business in order that it be merged with Micro Focus. He has led a repositioning of the HPE Software portfolio to the needs of today's market and put in place a plan to increase our effective product investment as we integrate the companies."

Hsu quit the London Stock Exchange-listed company to "spend more time with his family and pursue another opportunity," Micro Focus said.

Stephen Murdoch, who currently serves as Micro Focus' chief operating officer, will replace Hsu as CEO.

The company has a market capitalization of £3.73 billion ($5.2 billion). That's down sharply from its pre-HPE deal valuation of £4.45 billion. Micro Focus was trading at £8.31 a share at about 10:30 a.m. London time (5:30 a.m. ET), down almost 56 percent on the day.

https://www.cnbc.com/2018/03/19/micro-focus-shares-tank-after-ceo-exit-hpe-deal-related-sales-warning.html

Micro Focus shares fall 15pc as it misses revenue targets after £7bn HPE acquisition

Shares in @Micro Focus plunged more than 15pc today after a “disappointing” trading update knocked the shine off its blockbuster £7bn takeover of @HPEnterprise’s software business.    The company, which makes business applications, completed the acquisition in September, propelling itself towards the top of the FTSE 100 and becoming Britain’s largest software company in the process. But while the deal helped push its revenues up 81pc to $1.2bn (£900m) in the six months to Oct 31, sales in its existing business fell 2.7pc on a constant currency basis, below forecasts it would be broadly flat. And revenues from the acquired business were towards the bottom end of expectations.

http://www.telegraph.co.uk/business/2018/01/08/micro-focus-shares-fall-15pc-misses-revenue-targets-hpe-acquisition/

HPE wraps up $8.8bn Micro Focus software dump spin-off

#HPE says it has closed the $8.8bn deal to spin off much of its software business with #MicroFocus. The enterprise giant said that the deal – which sees HPE merge the unwanted portion of its software operation with the UK-based Micro Focus to create what analysts estimate to be the seventh-largest software vendor in the world – had been finalized. "With the completion of this transaction, HPE has achieved a major milestone in becoming a stronger, more focused company, purpose-built to compete and win in today's market," said HPE CEO Meg Whitman. "And, this transaction will deliver approximately $8.8bn to HPE and its stockholders." First announced in September 2016, the reverse-takeover agreement sees HPE selling off its IT management, big data, and security lines to Micro Focus, which will try to make the products more successful than they were under the former HP Inc. "Our business strategy remains sound: bringing together software assets that deliver a high degree of value to our investors and an expansive solution portfolio to our customers so they can maximize the value of existing IT investments and adopt new technologies, essentially bridging the old and new," Micro Focus executive chairman Kevin Loosemore said. According to analysts, the success or failure of the newly combined Micro Focus will depend largely on its ability to take over two key markets. Forrester's Eveline Oehrlich sees DevOps and enterprise service management being the lines that will make or break the company as it looks to win over enterprise customers. This means areas such as data center automation and hybrid cloud management will be of particular importance. "Its mission is enterprise automation for hybrid technology environments," Oehrlich explained. "The new Micro Focus will tackle one of the toughest problems facing infrastructure and operations leaders at all companies that weren't born digital: managing a heterogeneous ecosystem that includes everything from mainframes to containers running in cloud environments." ®

https://www.theregister.co.uk/2017/09/01/hpe_8bn_micro_focus_software_spinoff/

Micro Focus posts pre-HPE Software borg numbers

Its the last set of results it'll post before its $8.8bn spin merge deal with #HPESoftware, and the UK's #MicroFocus is keen to show it has a clean bill of health. The software company reported unaudited revenues of about $1.38bn for year ended 30 April 2017, up 10.9 per cent from about $1.25bn on year ended 30 April 2016. Not taking takeovers into account, revenues last year dipped 0.9 per cent. "Mergers and acquisitions continue to be a key component of our strategy," exec chairman Kevin Loosemore explained, rather obviously. Aside from the #HPE Software deal, #MicroFocus has also acquired #Serena, #GWAVA Inc, #OpenATTIC and some assets from #OpenStack #IaaS and #CloudFoundry #PaaS over the year, it said. Overall, the #SUSE Portfolio trickled up to 22 per cent of revenue (from 20.4 per cent) while the Micro Focus Portfolio fell to 78 per cent from 79.6 per cent last year. Adjusted operating profit for Micro Focus was $539.4m, up from $453.7m. Before tax profit was $196.3m, up from $195.4m. Under the $8.8bn software business spin merge deal with HPE Software, Micro Focus paid the tech giant $2.5bn cash plus a 50.1 per cent stake in the merged organization, worth $6.3bn.

https://www.theregister.co.uk/2017/07/12/micro_focus_results/

What to expect from HPE Discover 2017

The annual conference kicks off today Twelve months is a long time in tech, as #HPE has spent this last year demonstrating. Since the last Discover conference in Las Vegas, HPE has acquired #Nimble Storage, launched its own consultancy service – #Pointnext – bought #Simplivity and #SGI, and spun off its software business to #MicroFocus. And that's just the highlights. What, then, does this mean for Discover 2017? Well, I expect that Meg Whitman's keynote will be, once again, full of strategy and explanation of what these acquisitions and divestments mean. In particular, I think we're going to hear a lot about Pointnext and how it fits in with HPE's vision. There will undoubtedly be some product news too, but I imagine it will be to do with existing themes and lines, such as ProLiant and edge computing/IoT, particularly as there has already been a Simplivity product released since the acquisition (the HPE Simplivity 380 in March) and it's a probably a little early for any concrete product announcements emerging from the Nimble purchase, although you never know. There's been some news about The Machine recently – HPE's in-memory computing project – and I would be surprised if it isn't name checked, but any totally new revelations would be a surprise. In short, a sedate but interesting conference lies ahead, with Monday focussing exclusively on the channel (follow coverage from that on our sister site Channel Pro), while Tuesday and Wednesday broaden out into the conference proper.
http://www.itpro.co.uk/strategy/28780/what-to-expect-from-hpe-discover-2017

Hewlett Packard Enterprise spins off Australian software staff after HPE-Micro Focus deal

#HPE has started to transfer staff from its Australian software business unit to a new entity as part of its global spin-off and merger with #MicroFocus. Some 87 HPE employees are being transferred to new company Entco Australia, according to a filing with the Fair Work Commission. Entco trades as Hewlett Packard Enterprise and was established in September 2016. A HPE spokesperson told CRN this was part of a plan that would see 12,000 employees around the world transferred to the new merged business as part of the proposed spin-off and merger of HPE's software business and Micro Focus announced in September 2016.

https://www.crn.com.au/news/hewlett-packard-enterprise-spins-off-australian-software-staff-after-hpe-micro-focus-deal-462330

HP Enterprise Reaches $8.8 Billion Software Deal With Micro Focus

Hewlett Packard Enterprise Co ( #HPE ). disclosed an $8.8 billion deal to spin off and merge most of its software operations with Britain’s #MicroFocus International PLC, the latest move by the Silicon Valley giant to narrow its business focus. Under the deal, #HP Enterprise shareholders would get Micro Focus shares currently valued at about $6.3 billion and own slightly more than half the company. Micro Focus also will pay HP Enterprise $2.5 billion in cash. The proposed deal would be the largest purchase by a British firm of a foreign technology company. It comes despite a steep drop in the pound against the U.S. dollar after the U.K. voted in June to exit from the European Union, making the acquisition potentially more expensive for Micro Focus.

Under terms of the agreement, HP Enterprise would divest businesses that include the former operations of Autonomy Corp., a British software maker acquired in 2011 for $11 billion in a deal widely regarded as a mistake.

HP Enterprise, created during last fall’sbreakup of Hewlett-Packard Co., sells hardware, software and services to businesses. Since the split, its chief executive, Meg Whitman, has moved to further narrow the company’s focus through a series of sales and spinoffs.

Ms. Whitman said the Micro Focus deal, announced along with its fiscal third-quarter earnings, should help her company concentrate on core businesses while transferring the divested operations to a team that was more likely to realize their potential.

“This is all about focusing the company on a strategy we know we can win at,” Ms. Whitman said in an interview.

In May, HP Enterprise completed a $2.3 billion deal in China to sell a 51% stake in a venture called H3C that sells networking, server and storage hardware and related services. That same month, HP Enterprise struck a deal to spin off a computer services business that employs about 100,000 people—two-thirds of the company’s workforce count—and merge it with operations of Computer Sciences Corp.

The software businesses employ about 12,000 people. Once the latest transactions are closed next year, HP Enterprise’s staff will have declined to between 50,000 and 60,000 employees from about 210,000, Ms. Whitman said.

Kevin Loosemore, executive chairman of Micro Focus, will head the combined company.

Newbury, England-based Micro Focus specializes in software that works with older computer systems, Mr. Loosemore said in an interview. The assets his company is acquiring fit that strategy well, he said. Two years ago, the company acquired U.S. rival The Attachmate Group Inc. for $1.2 billion.

HP Enterprise on Wednesday reported revenue in the software operations declined 18% from the same quarter a year earlier. The company plans to keep some software products, particularly programs associated with keeping companies’ back-office computing infrastructure running. Those products include software-defined networking, an adjunct to HP Enterprise’s networking hardware business.

After the Micro Focus deal, which mainly involves business applications software, the Palo Alto, Cailf., company is “basically all-in on infrastructure,” said Crawford Del Prete, an analyst at International Data Corp.

HP Enterprise said its third-quarter results included a sevenfold jump in net income because of a $2.2 billion gain from the May sale of a Chinese unit called H3C. But there were signs of weakness in some of its hardware businesses.In all, the company reported profit for the period ended July 31 of $2.27 billion, or $1.32 a share, compared with $320 million, or 19 cents a share, a year earlier. Revenue declined to $12.2 billionfrom $13.06 billion.

The company said third-quarter server revenue was 4% lower than the year-earlier period. Storage revenue also was down 8% and networking revenue down 22%.

On an adjusted basis excluding one-time gains and charges, HP Enterprise said its per share profit was 49 cents, compared with 45 cents in the year-earlier period. Analysts on that basis had predicted earnings per share of 44 cents on revenue of $12.64 billion.

For the current quarter, the company estimated it will report adjusted earnings per share of 58 cents to 63 cents. Analysts on that basis had predicted earnings of 60 cents a share.

HP Enterprise increased its estimate for earnings for the fiscal year ending in October. It projects adjusted earnings per share of between $1.90 and $1.95, up from a prior projection of between $1.68 and $1.78.

The company’s share price declined about 2% in after-hours trading.

http://www.wsj.com/articles/hp-enterprise-plans-8-8-billion-software-deal-with-micro-focus-1473279596?mkt_tok=eyJpIjoiWWpJeFkyUmxNMkpsWlRBMyIsInQiOiJSWU1na05JbmxOQTg5ZEpweHZ0Wk1pMEhpSUhmWFwvSWRDNGxZcU9QbDJUSVozcEdJZ2xOdTJIdmZIYWVWdytcL3hGb3VrUW5EVXFnMnl2emVyZ2pZMlh0OGtCeGZ0ejZyNHhOZGxydDhWbnpRPSJ9