Dive Brief:
- Private equity firms are reportedly considering the purchase of some of Hewlett Packard Enterprise’s software assets, unidentified sources told Reuters and other news outlets last week.
- The assets are reported to be worth between $6 billion and $8 billion, according to Reuters.
- Companies like HPE that make server and storage equipment have seen sales drop as more customers choose to use cloud instead. HPE and others also face stiff competition from Asian manufacturers offering low cost servers.
Dive Insight:
The Information at first reported that private equity firms including KKR & Co LP, Apollo Global Management LLC and Carlyle Group LP were "contemplating a buyout" of all of HPE in a move that would take the company private. But the latest information appears to confirm that only a portion of the company is potentially up for grabs.
Several business software makers, including SolarWinds, Solera Holdings and Informatica all chose to go private last year to, among other things, "accelerate their transition to cloud-based offerings." In 2015, Informatica was acquired by Permira Advisers LLC and the Canada Pension Plan Investment Board.
CEO Meg Whitman has been working to turn HPE around, including shedding underperforming business units, like its IT services division. In July, reports surfaced that HPE was weighing the potential sale of a portfolio of software assets, including several companies HP acquired over the last decade, such as Autonomy, Mercury Interactive and Vertica Systems.
