Hewlett-Packard Co. is lowering its profile in consumer electronic but expanding its line-up of business software products as it purchased Autonomy Corporation.
The world’ largest technology company in terms of revenue had other dramatic moves aside from the acquisition which was announced Thursday. With the deal, HP expects to sharpen its focus from making consumer gadgets to selling products and services to business and government agencies.
HP expects to provide another lure in the business market with its purchase of HP, giving it leverage among its rivals Cisco Systems Inc., Oracle Corp. and IBM Corp.
Autonomy, which is based in Cambridge, England, creates search engines that allow companies to find computer-stored vital information across networks.
HP CEO Leo Apotheker is paying a steep price for Autonomy at $10 billion which is 11 times greater than the $870 million annual revenue and $42.11 per share which is 64 percent higher than the previous closing price of Autonomy.
HP dipped into its offshore stash of cash to pay for the purchase price of the company since Autonomy is located out of the United States. This is an attractive option for U.S. companies because transferring money from home would amount to higher taxes.
HP had $13 billion in cash as of the end of July but it did not break down how much of this was held offshore.
Offshore cash stash is also being used by Microsoft Corp to buy Internet phone and video service Skype for $8.5 billion.
Sanford Bernstein analyst Toni Sacconaghi said Apotheker was taking a big risk in purchasing Autonomy since HP’s stock were down by 30 percent ever since Aoptheker took over as CEO last November.
HP to pay $10B for Autonomy as it exits mobile
Hewlett-Packard Co. is lowering its profile in consumer electronic but expanding its line-up of business software products as it purchased Autonomy Corporation.
The world’ largest technology company in terms of revenue had other dramatic moves aside from the acquisition which was announced Thursday. With the deal, HP expects to sharpen its focus from making consumer gadgets to selling products and services to business and government agencies.
HP expects to provide another lure in the business market with its purchase of HP, giving it leverage among its rivals Cisco Systems Inc., Oracle Corp. and IBM Corp.
Autonomy, which is based in Cambridge, England, creates search engines that allow companies to find computer-stored vital information across networks.
HP CEO Leo Apotheker is paying a steep price for Autonomy at $10 billion which is 11 times greater than the $870 million annual revenue and $42.11 per share which is 64 percent higher than the previous closing price of Autonomy.
HP dipped into its offshore stash of cash to pay for the purchase price of the company since Autonomy is located out of the United States. This is an attractive option for U.S. companies because transferring money from home would amount to higher taxes.
HP had $13 billion in cash as of the end of July but it did not break down how much of this was held offshore.
Offshore cash stash is also being used by Microsoft Corp to buy Internet phone and video service Skype for $8.5 billion.
Sanford Bernstein analyst Toni Sacconaghi said Apotheker was taking a big risk in purchasing Autonomy since HP’s stock were down by 30 percent ever since Aoptheker took over as CEO last November.
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