Hewlett-Packard on Thursday made its most aggressive move yet to transform itself into a modern business provider by acquiring e-discovery and document management giant Autonomy for $10.3 billion, putting its personal computer division up for sale, and discontinuing its recently launched WebOS mobile device group.
HP says it hopes the majority of its future revenue comes from sales of printers, professional services, software, and enterprise-class hardware, resulting in a structure more similar to that of IBM than Apple.
"Today is about transforming HP for the future," CEO Léo Apotheker said in the Palo Alto, Calif., company's third-quarter earnings call. "HP is at a critical point in its existence."
"Autonomy sees the information transformation and subsequent market opportunity exactly as we do," Apotheker said later in the call. "The two companies and cultures will blend together well ... Bringing Autonomy into the HP world will be seamless and complementary."
The news reverberated throughout the legal technology field, marking its largest-ever acquisition, according to David Horrigan, a Boston-based e-discovery analyst for the 451 Group. The deal's price tag is higher than the combined total of two recent major transactions: Autonomy's $380 million acquisition of Iron Mountain assets and Symantec's $390 million purchase of Clearwell Systems.
But some, like Law Technology News editorial board member and e-discovery columnist Craig Ball, see the Autonomy purchase price as overvalued. "Autonomy's e-discovery revenue stream is high-end but unsustainable based on pricing pressures," he said in an e-mailed response to questions. "If their EDD business mirrors their other units in such things, I predict a $2 billion write-down on a $10 billion transaction within five years."
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Source: law.com
By: Evan Koblentz
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