Hewlett-Packard (HP) Company is set to buy European infrastructure software company Autonomy for as much as $10 billion. That price would make the acquisition one of HP’s largest deals to date.
Autonomy’s enterprise software powers pan-enterprise search, customer interaction solutions, information governance, end-to-end eDiscovery, records management, archiving, business process management, web content management, web optimization, rich media management and video and audio analysis. The Autonomy’s software allows enterprises to provide insight and structure to electronic data, including unstructured information, such as text, email, web pages, voice, or video.
Autonomy, the second-largest U.K. software maker, offers programs used in database search. The Autonomy’s customers include Coca-Cola Co. (KO), Nestle SA (NESN) and the U.S. Securities and Exchange Commission.
Shareholders of Autonomy will receive $42.11 a share, that’s 64 percent more than Autonomy’s close yesterday. Hewlett-Packard, whose shares fell after the company issued forecasts that missed estimates, also said it’s considering spinning off its PC division and that it will discontinue products that run WebOS software.
Hewlett-Packard is paying 24 times Autonomy’s trailing earnings before interest, taxes, depreciation and amortization, compared with a median of 17 times Ebitda in 10 comparable deals.
Léo Apotheker, Hewlett-Packard president and chief executive officer of HP said in a statement:
“Autonomy presents an opportunity to accelerate our strategic vision to decisively and profitably lead a large and growing space…Together with Autonomy, we plan to reinvent how both unstructured and structured data is processed, analyzed, optimized, automated and protected. Autonomy has an attractive business model, including a strong cloud based solution set, which is aligned with HP’s efforts to improve our portfolio mix. We believe this bold action will squarely position HP in software and information to create the next-generation Information Platform, and thereby, create significant value for our shareholders… Autonomy is a highly profitable and globally respected software company, with a well-regarded management team and talented, dedicated employees. We look forward to partnering with a company who shares our commitment to solving customer problems by creating smart, cutting-edge products and solutions.”