HP announced a strategic plan to enter into higher value, higher margin growth categories by sharpening its focus on cloud, solutions and software for enterprises and government customers. Key aspects of the plan include:
- Explore strategic alternatives for the company’s Personal Systems Group, including a spin-off or sale of the division. PSG is the leading manufacturer of personal computers in the world and had annual revenues of approximately $41 billion in fiscal year 2010. For its most recent quarter, Personal Systems Group (PSG) revenue declined 3% year over year with a 5.9% operating margin. PSG remains the PC market leader in terms of units, revenue and profit share. For comparison, margins for HP’s Enterprise Servers, Storage and Networking group are 13% and margins for HP’s Software group are 19.4%
- Discontinue operations for webOS devices, specifically the TouchPad and webOS phones. The TouchPad entered the market only about a month ago, but sales have not met internal milestones and financial targets. HP is exploring the possible sale webOS software or intellectual property.
- Acquire Autonomy Corporation plc for £25.50 ($42.11) per share in cash, representing a one day premium of approximately 64 percent and a premium of approximately 58 percent to Autonomy’s prior one month average closing price.
- Autonomy’s Intelligent Data Operating Layer (IDOL) platform allows computers to harness the richness of information, forming a conceptual and contextual understanding of any piece of electronic data, including unstructured information, such as text, email, web pages, voice and video.
“HP is taking bold, transformative steps to position the company as a leader in the evolving information economy. Today’s announced plan will allow HP to drive creation of long-term shareholder value through a focus on fewer fronts, thereby improving its ability to execute, invest in innovation and drive a higher-margin business mix,” stated Léo Apotheker, HP president and chief executive officer. http://www.hp.com