HP has announced that it has signed a definitive agreement to purchase Opsware Inc., a market-leading data center automation software company, through a cash tender offer for $14.25 per share, or an enterprise value (net of existing cash and debt) of approximately $1.6 billion on a fully diluted basis.
Upon closing, the acquisition will enhance HP's portfolio of Business Technology Optimization (BTO) software. Combining Opsware's solutions with HP's enterprise IT management software will deliver a comprehensive and fully integrated solution for IT automation. Opsware is the latest in a series of strategic software acquisitions, including Mercury Interactive and Peregrine Systems, which expands HP's leadership in BTO.
"The acquisition of Opsware is intended to enable HP Software to help our customers resolve one of their critical pain points: controlling the increasing complexity and cost of managing the data center," said Thomas E. Hogan, senior vice president, Software, HP. "We expect Opsware's outstanding team will help us drive leadership across our BTO offerings."
Opsware chief executive officer Ben Horowitz said: "We are about to see one of the biggest application and infrastructure build-outs in history. The addition of Opsware to the HP Software portfolio will make HP the obvious choice for powering the next generation of data centers to come."
The acquisition of Opsware is intended to extend HP Software's capabilities to automate the entire data center - from initial provisioning of servers, networks and storage devices to managing ongoing changes and compliance requirements - with integrated process automation, removing the latency inherent in today's IT environments.
"Following last year's acquisition of Mercury Interactive, the addition of Opsware is expected to enhance HP's standing as one of the world's leading software companies and drive profitable growth for HP," said Ann Livermore, executive vice president, Technology Solutions Group, HP. "With this strategic acquisition, I believe customers will see HP as the clear vendor of choice to help them transform how they manage and automate IT to drive better business outcomes."
According to Opsware co-founder, Marc Andreessen, the acquisition will be conducted by means of a tender offer for all of the outstanding shares of Opsware, followed by a merger of Opsware with an HP subsidiary. The tender offer is subject to a number of customary closing conditions, including regulatory approvals, and is expected to close before the end of HP's fourth fiscal quarter of 2007.
For Opsware, this means that our vision will now get delivered at much higher scale - being part of HP's software business will ensure that our software will be used by a much larger number of organizations and have an even more dramatic impact on the industry than we would possibly have been able to reach by ourselves over the next several years.
For HP, this means that HP instantly becomes the clear and overwhelming market leader in automation software for modern data centers and computer systems. HP's software product family will now cover the vast majority of needs of any modern technology organization. HP has a first-class opportunity to define the architecture and be the major vendor of infrastructure - hardware and software - for the huge Internet build-out of the next 10 years.'