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HPE spins off enterprise services

April 4, 2017

The company is “adjusting its outlook” after the enterprise services business was spun off.

ZDNet reported on the move by HPE to “spin-merge” its enterprise services business and Computer Sciences Corp, which has created DXC Technology. This means that “enterprise services [is] no longer contributing to its financials”, and will “deliver” about $13.5 billion (€12.6 billion) to HPE after tax, alongside an “equity stake in DXC, a cash dividend payment” and DXC’s “assumption of debt and other liabilities”.

As a consequence of the deal, HPE is “adjusting its outlook for the second quarter” and financial year, with shares expected to fall by eight cents in the quarter and 42 cents for the year. The company will “retain and continue to invest in Pointnext, its newly-defined technology services organisation, while also maintaining a strong relationship with DXC”. In turn, HPE CEO Meg Whitman will “take a seat on the DXC board” as part of the deal.

She stated: “The close of this transaction leaves HPE with a crystal clear mission, tied directly to the solutions our customers and partners tell us they want most. I am also particularly proud that this transaction will deliver approximately $13.5 billion in value to HPE and its stockholders, which is almost 60 percent higher than when it was first announced last year.”

HPE, the sister company to HP Inc formed after the split a couple of years ago, sold off much of its business services to CSC, and its software to Micro Focus previously.

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