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Acer America
Acer America Corp. is a computer manufacturer of business and consumer PCs, notebooks, ultrabooks, projectors, servers, and storage products.

Location

333 West San Carlos Street
San Jose, California 95110
United States

WWW: acer.com

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News

May 24, 2016 |

Hewlett Packard Enterprise Announces Plans for Tax-Free Spin-Off and Merger of Enterprise Services Business with CSC

The transaction will deliver HPE shareholders approximately $8.5 billion in expected after-tax value in stock-for-stock exchange.

Hewlett Packard Enterprise has revealed plans for a tax-free spin-off and merger of its Enterprise Services business with Computer Sciences Corp. (CSC).

Following the transaction, currently targeted to be completed by March 31, 2017, HPE shareholders will own shares of both HPE and approximately 50 percent of the new company.†The transaction is intended to be tax-free to HPE, CSC, and their respective shareholders for federal income tax purposes.†

“The ‘spin-merger’ of HPE’s Enterprise Services unit with CSC is the right next step for HPE and our customers,” says Meg Whitman, president and chief executive officer of Hewlett Packard Enterprise.†”Enterprise Services’ customers will benefit from a stronger, more versatile services business, better able to innovate and adapt to an ever-changing technology landscape.”

The new company, combining CSC and HPE’s Enterprise Services business, is expected to have annual revenues of approximately $26 billion and more than 5,000 customers in 70 countries.†Mike Lawrie, the current head of CSC, will become chairman, president, and CEO of the new company, and Meg Whitman will join the Board of Directors. The new company’s board will be split 50/50 between directors nominated by HPE and CSC.†

The transaction is expected to deliver approximately $8.5 billion to HPE’s shareholders on an after-tax basis.†This includes an equity stake in the newly combined company valued at more than $4.5 billion, which represents approximately 50 percent ownership, a cash dividend of $1.5 billion, and the assumption of $2.5 billion of debt and other liabilities.†

“As two standalone companies with global scale, strong balance sheets, and focused innovation pipelines, both HPE and the new company that combines CSC and HPE’s Enterprise Services segment will be well positioned as leaders in their respective markets,” says Whitman. “For HPE, our balance sheet, capital allocation strategy, and cost structure will now be fully optimized for a faster growing, higher margin and more robust free cash flow business. And, the new company will be in a stronger position to win than either organization could have been on its own.”

This announcement builds on the progress HPE has made to turn around the Enterprise Services business and improve its operating model, labor mix, and financial profile.†As a result of these improvements, Enterprise Services delivered stable revenue for the first two quarters of fiscal 2016, which were the first quarters of year-over-year constant currency revenue growth since fiscal 2012.


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