Reports: HPE possible target of private equity buyers
Potential deal for server and storage giant could approach $40bn it emerged over the weekend
A number of private equity firms are eyeing Hewlett Packard Enterprise (HPE) as a possible buyout candidate in what could culminate in a blockbuster $40bn deal, according to a recent report in The Information.
Prominent private equity firms, including KKR, Apollo Global Management and Carlyle Group, are taking very preliminary look-sees, perhaps mulling a deal that would turn the enterprise server, storage and services provider into a privately held company, the report said.
Were such a public-to-private deal for HPE come to pass, it would rank ahead of Dell's $25bn MBO two years ago but well behind the pending $67bn Dell-EMC acquisition.
The migration of enterprises to public cloud providers AWS, Microsoft's Azure and Google's cloud is exerting pressure on HPE's server and storage business as customers turn to cheaper hardware from Asian manufacturers, the report suggested.
However, HPE's Q2 2016 earnings, at least for the moment, indicate otherwise. For the quarter, the company recorded a one percent year-over-year increase in revenue to $12.7bn and GAAP net earnings per share of $0.18, up from $0.16 for the same period last year.
HPE CEO Meg Whitman called HPE's FQ2 the "best performance" since she joined in 2011. The vendor projects FQ3 non-GAAP net earnings in the range of $0.42 to $0.46 per share.
The report comes in the wake of HPE's planned $26bn spin-merger announced in late May to combine its enterprise services unit with CSC to form an IT services pure play consultancy.
And it follows an extensive overhaul of HPE's sales and marketing organisations, which the company disclosed a month ago.
HPE also is said to be mulling a sell-off of some of its software assets, possibly including Autonomy, Mercury Interactive and Vertica.
Meanwhile, K.C. Choi, a key HPE technologist, has exited the company in favour of EMC in an as-yet unannounced executive role, according to The Information.