HP to acquire software maker
Hewlett-Packard Co. said Monday that it would pay $1.6 billion in cash to acquire Opsware Inc., a software company founded by Internet pioneer Marc Andreessen that helps companies lower the cost and complexity of running their data centers by automating certain management tasks.
HP agreed to pay $14.25 per share of Opsware, a 39% premium over Opsware’s closing price Friday. The acquisition is expected to close before HP’s fiscal year ends Oct. 31.
Opsware shares shot up $3.72, or more than 36%, to $14 on Monday. HP fell 11 cents to $48.43.
The deal bolsters HP’s software business and underscores the need for new tools to manage increasingly complicated corporate computing centers.
Opsware’s products make it easier for technology managers to control the servers, storage machines and networking gear in their data centers by automating the way business applications and other jobs are handled.
Analysts said automation was one of the few strategies companies have left for reducing data center costs, and the segment is poised to grow.
The deal marks another windfall for Andreessen, who made a fortune while in his 20s after AOL paid $10 billion in 1999 for Netscape Communications, the pioneering Web browsing company that he co-founded.
Andreessen stands to pocket more than $138 million for his stake in Sunnyvale, Calif.-based Opsware, which was 9.69 million shares, more than 9% of the company, according to a regulatory filing in May.
Once the deal closes, Opsware will become part of HP’s growing software division, which also includes Mercury Interactive, which HP bought for $4.9 billion in November 2006, and Peregrine Systems, which HP bought in December 2005 for $538 million.
The companies make so-called business technology optimization software, which helps companies cut costs and simplify their technology operations. Expansion in that area is a major push for Palo Alto-based HP, currently the world’s No. 1 personal computer seller, ahead of Dell Inc.
The acquisitions have brought some baggage, with former executives at each of the three acquired companies in trouble over accounting problems.
Opsware Chief Financial Officer Sharlene Abrams resigned in July 2006 after the Securities and Exchange Commission warned her that she was going to be sued for her role in the stock option backdating scandal at her previous employer, Mercury Interactive, where she also was CFO.
In May of this year, the SEC filed civil fraud charges against Mercury Interactive, Abrams and three other former senior officers.
They were accused of illegally awarding secret stock option grants to themselves and other employees from 1997 to 2005 and falsifying documents to keep hundreds of millions of dollars in compensation expenses out of the company’s financial reports.
HP agreed to pay $28 million to settle the charges while the case against the officers was being litigated.
And in March of this year, Peregrine former Chief Executive Stephen Parker Gardner pleaded guilty to criminal conspiracy, securities fraud and obstruction of justice for an accounting fraud scheme that bankrupted the San Diego-based company in 2002.
The indictment also names seven other former Peregrine executives and three other defendants.
Separately, HP said Monday that it would pay $214 million, or $16.25 a share, to acquire Neoware Inc., based in King of Prussia, Pa. Neoware makes so-called “thin-client” computers, or machines that are powered and controlled by centrally managed servers instead of individual hard drives.
The price represents a 7% premium over Neoware’s closing price Friday.
