HPE lightens load again in $8.8B spinoff

Will merge non-core software assets with U.K.’s Micro Focus

“We are not getting out of software. Software is still a key to our core mission and strategy.” Meg Whitman, CEO of HPE

Hewlett Packard Enterprise will spin off yet another part of itself, further honing the company created when it was formed as part of the breakup of Hewlett Packard last fall.

HPE will merge non-core software assets with the United Kingdom’s Micro Focus in a deal valued at $8.8 billion, both companies announced Wednesday.

The transaction includes a 50.1% ownership of the new company by HPE shareholders as well as a $2.5 billion cash payment to HPE.

HPE shares were down 3% in after-hours trading on the news.

The spinoff is meant to accelerate the company’s strategy of unlocking faster-growing, higher- margin portions of its business, according to HPE.

HPE CEO Meg Whitman told USA TODAY the company is still focused on systems software, which powers its machines.

She deemed it “highly unlikely” HPE will split off any more operations.

“We are not getting out of software,” Whitman said in a phone interview. “Software is still a key to our core mission and strategy.”

HPE also reported third-quarter earnings Wednesday.

Its non- GAAP earnings of 49 cents per share beat the market’s expectations of 45 cents per share as polled by S&P Global Market Intelligence.

The company’s revenue was $12.2 billion, against an estimated $12.62 billion.

Whitman called the quarter “solid.”

The new company will include several of HPE’s software assets, such as big data, enterprise security, information management and IT operations management, creating what HPE called “one of the world’s largest pure-play software companies,” in a release.