HP acquires software firm for US$4.5bn

26 Jul 2006

IT giant HP has signed an agreement to acquire information management software company Mercury Interactive Corp for US$4.5bn in cash. The move is aimed at giving HP a decisive lead in the business market for IT services.

The transaction allies HP’s expertise in network and IT services management with Mercury’s strength in application management, application delivery, IT governance and service-oriented architecture (SOA) governance.

The Mercury acquisition is expected to increase the size of the HP software business to more than US$2bn in annual revenues.

“Today we are combining two market-leading businesses to create the most powerful management software portfolio in the industry,” said Mark Hurd, HP chief executive officer and president.

“Together they will help customers cut their IT costs, speed the delivery of new services and drive profitable growth at HP. We expect this important acquisition to deliver significant value for our shareholders.”

HP expects the acquisition to close in the fourth quarter of this year.

“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,” said Thomas E Hogan, senior vice-president, software, HP.

“Combining our HP OpenView offerings with Mercury’s BTO (business technology optimisation) Enterprise offerings will integrate the many building blocks of enterprise IT management into one complete solution for the entire IT lifecycle, from planning through to deployment and operations. Mercury is a results-driven, high-performing company with outstanding people that will be a strong addition to HP.”

By John Kennedy