HP has acquired 100% of Mercury Interactive, an IT management, software and services company, through a cash tender offer for $52 per share, or an enterprise value of $4.5 billion.
The acquisition is expected to increase the size of HP`s software business to more than $2 billion in annual revenue, the company says in a media statement.
"HP`s software strategy is to be the clear leader in end-to-end enterprise IT management and help our customers tightly align IT priorities with changing business requirements," says Thomas E Hogan, senior VP of HP`s software division.
Hogan says the acquisition will combine HP`s OpenView offerings with Mercury`s BTO Enterprise offerings, integrating the many building blocks of enterprise IT management into one complete solution.
Mercury recently acknowledged its top executives improperly manipulated the timing of stock option awards to increase their potential windfalls. The company still faces lawsuits from shareholders alleging management misled them, and the Securities and Exchange Commission is conducting an investigation that could culminate in substantial penalties, reports latimes.com.
The local Mercury operation closed down last year after country manager Magda Engelbrecht left for unexplained reasons.
Since then, Mercury has been represented locally by EOH, whose division Mercury Africa is a local master distributor for Mercury software.
Local impact
Hogan says immediately following the close of the transaction, Mercury will become part of the HP Software business and both companies` sales forces will begin reference-selling each other`s products.
Claude Ibalanky, head of corporate communications for HP SA, says input on the potential impact of the deal in SA has not filtered to country-level yet. However, he notes, previous experience with HP acquisition shows the integration of HP SA and Mercury is likely to result in increased opportunities, instead of job losses.
Lenore Kerrigan, Mercury`s alliance director in the sub-Saharan region, says global changes will only begin in the fourth quarter of 2006.
While Mercury does not foresee a major local change in the immediate future, it is up to HP to make strategic decisions on the way forward, she says.
Kerrigan notes the purchase must be great news for customers as the two together make a powerful combination, she says.
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