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Hewlett-Packard to Acquire Opsware for $1.6 Billion

Rumor had it that VMware was going to be acquiring Opsware.  With all that IPO money coming in at some point, it seemed like a logical step for them.  Now, it looks as though they won't have the chance.  Did HP beat them to the punch?  Who saw this one coming?

Bloomberg reports:

Hewlett-Packard Co. will buy Opsware Inc., the software company founded by technology pioneer Marc Andreessen, for about $1.6 billion to extend its push into data center programs. Opsware shares soared.

Opsware, founded in 1999 by Andreessen as Loudcloud, makes programs that manage data centers for more than 350 clients, including JPMorgan Chase & Co. and Target Corp. Andreessen would pocket about $138 million for his Opsware stake, based on the latest proxy filing.

Hewlett-Packard, the world's biggest maker of personal computers, has sought acquisitions to bolster its software unit, whose revenue growth is outstripping gains in businesses such as storage and servers and printers. The company has spent about $6.5 billion in the past two years to add software makers such as Mercury Interactive Corp. and Peregrine Systems.

``The acquisition is a nice strategic fit with Hewlett- Packard's software portfolio,'' said Brian Alexander, an analyst with Raymond James & Associates in St. Petersburg, Florida. The purchase ``addresses server and network automation capabilities, areas that Hewlett-Packard was missing.'' Alexander rates Hewlett-Packard ``outperform'' and owns 2,000 shares of Sunnyvale, California-based Opsware.

Andreessen, 36, co-founded Netscape Communications Inc. and helped develop the first Internet browser. Based on Opsware's latest proxy, he owned about 9.7 million shares as of May. Opsware spokesman Kevin McGuirk didn't immediately return a call seeking a comment.

Opsware Soars

Opsware shares climbed $3.72, or 36 percent, to $14 at 9:44 a.m. New York time in trading on the Nasdaq Stock Market. Hewlett-Packard shares rose 32 cents to $48.86 in New York Stock Exchange composite trading.

The per-share price of the bid is $14.25 in cash, Palo Alto, California-based Hewlett-Packard said today in a statement. That's 39 percent more than Opsware's closing stock price of $10.28 on July 20.

``This is another demonstration of HP's commitment to being a global leader in software,'' Thomas Hogan, senior vice president at Hewlett-Packard's software business, said in an interview.

Revenue at the software unit rose 58 percent in the second quarter, Hewlett-Packard said May 16. That compared with 8.3 percent growth in the storage and servers unit, and a 6.5 percent increase for imaging and printing.

Separately, Hewlett-Packard said today that it agreed to buy Neoware Inc., a King of Prussia, Pennsylvania-based software maker, for about $214 million, or $16.25 a share. Neoware's software lets companies centralize the management of desktop computers.

Read Bloomberg's original article, here.

Thanks to Richard Cardona for passing along the news!

Published Monday, July 23, 2007 7:41 AM by David Marshall
Comments
Opsware stocks | Gilardin - (Author's Link) - August 5, 2011 5:14 AM
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