Hewlett Packard Enterprise Company · NYSE:HPE
Hewlett Packard Enterprise — Merger or Acquisition (September 2016)
29 slides from Hewlett Packard Enterprise's merger presentation, Sep 7, 2016
Slide 1: Proposed Merger of Micro Focus with HPE Software Business Segment
Proposed Merger ofMicro Focus International plc withHewlett Packard Enterprise’s (“HPE”)Software Business Segmentand Proposed Commercial Partnership with HPE Kevin Loosemore & Mike Phillips7 September 2016
Slide 2: Agenda
Agenda Transaction SummaryHPE Software Overview & Combination RationaleFinancial Impact ImplementationExpected Transaction Timetable & Conclusions 2
Slide 3: Transaction summary
Co Transaction summary
Slide 4: Announcement 'At A Glance' – Key Points
Announcement ‘At A Glance’ – Key Points 4 Industry Logic Aggregate Consideration Combination Shareholder Impact 1 Based upon the closing share price of Micro Focus as at 6 September 2016; Consideration comprises $6.3bn in Micro Focus equity to HPE shareholders and $2.5bn cash payment to HPE; 2 Acqui
Slide 5: Transaction Overview
Transaction Overview HPE Software revenues4 for the twelve months ended 30 April 2016 of $3.2bn (LTM Q2 2016 y-o-y growth rate adjusted for divestitures, MOBU and currency of 1.5%) and Acquired EBITDA2 was $738mAcquisition of HPE Software brings infrastructure software products comprised of five sol
Slide 6: Transaction Overview (cont'd)
Transaction Overview (cont’d) Financial Impact Deal financed by the issue of Consideration Shares to HPE shareholders at Completion, with a market value of $6.3bn1 and a pre-Completion cash payment to HPE of $2.5bnMicro Focus has entered into commitments for a total of US$5.5 billion of debt financi
Slide 7: Micro Focus Strategy: Unchanged, Still Working
Micro Focus Strategy: Unchanged, Still WorkingReiterated in July preliminary results for the twelve months ended 30 April 2016 Micro Focus helps bridge the old and the new by enabling you to: Exploit advances in technology such as virtualisation, cloud and mobile without the cost and risk of startin
Slide 8: HPE Software Overview & Combination Rationale
HPE Software Overview & Combination Rationale
Slide 9: Business Overview: HPE's Software Business Segment
Business Overview Hewlett Packard Enterprise’s Software Business SegmentGlobal footprint spanning the Americas, Asia Pacific & Japan and Europe, Middle East & Africa (“EMEA”) regionsProduct and service offeringsProvides enterprise software solutions for IT operations management, Applications deliver
Slide 10: HPE Software solution sets
IT operations management Application delivery management (ADM) Enterprise security products (ESP) Information management & governance (IM&G) Big data analytics Description Facilitating management, automation and optimisation of data centers and cloud infrastructure Quality and lifecycle tools for tr
Slide 11: Why Is It Good For SUSE? Commercial partnership with HPE
Why Is It Good For SUSE? Timetable The commercial partnership with HPE is another example of SUSE’s strategy to partner openly and broadly to provide increased choice in the marketplace for enterprise software-defined infrastructure solutions and follows SUSE’s recent announcement with MirantisSUSE
Slide 12: Extension Opportunity and Efficiency Opportunities
Extension Opportunity Significant Efficiency Opportunities Available Rare opportunity to significantly increase Micro Focus’ scale and breadth through combination with a business operating in adjacent and complementary product areasBreadth in segments such as ITOM and SIEM1, where the combination cr
Slide 13: Financial Impact
Co Financial Impact
Slide 14: Revenues: Micro Focus (IFRS) and HPE Software (US GAAP)
Micro Focus Pro Forma Revenue (FYE April, IFRS) HPE Software Pro Forma Revenue(FYE October, US GAAP) ~$4.5bnCombined Revenue Note: Actual Currency, Pro Forma (i.e. adjusted for a number of divestments at various points during the last two fiscal years and the transfer of the Marketing Optimisation B
Slide 15: EBITDA: Micro Focus (IFRS) and HPE Software (US GAAP)
Micro Focus Pro Forma UAEBITDA (FYE 30 April, IFRS) HPE Software Pro Forma UAEBITDA1(FYE 31 October, US GAAP) ~$1.35bnCombined EBITDA This represents the Micro Focus IFRS EBITDA added to the US GAAP EBITDA for the twelve months to April 30th 2016The IFRS treatment of the US GAAP financial statements
Slide 16: Strong Cash Flow Profile
Strong Cash Flow Profile Micro Focus Cash Flow From Operations1 (FYE 30 April) HPE Software Cash Flow From Operations1 (FYE 31 October) Note: Cash flow information for HPE Software on an as-reported basis. Hence cash flows include contributions – both negative and positive – from disposals. To this
Slide 17: Implementation
Co Implementation
Slide 18: Board & Management Team
Board & Management TeamThe management team has a long track record of driving shareholder returns Name Role Experience Kevin Loosemore Executive Chairman (11 years) Appointed non-executive Chairman of the Company in 2005 Executive Chairman in April 2011Previously non-executive Chairman of Morse plcP
Slide 19: Micro Focus Approach To Acquisition Integration
Micro Focus Approach To Acquisition Integration HPE and Micro Focus have agreed that, as soon as practicable, they will together form a separation committee to monitor and oversee the separation of HPE Software in accordance with the Transaction documentsMicro Focus has integrated many business over
Slide 20: Transaction Timetable & Conclusions
Transaction Timetable & Conclusions
Slide 21: Expected Timetable
Expected Timetable Announcement of the Merger: 7th September 2016Publication of the Micro Focus shareholder circular : H1 CY2017Micro Focus shareholder meeting to approve the Merger: H1 CY2017Publication of the Enlarged Group prospectus: Q3 CY2017Completion of the Merger: Q3 CY2017 Key dates 21
Slide 22: Conclusions: Rare Opportunity To Scale
Conclusions Rare Opportunity To Scale & Leverage Scale Economics Proposed acquisition offers an opportunity to achieve a significant increase in Micro Focus’ scale and in consequence enhances its offerings in existing business areas and adds new onesHPE Software revenues2 for the twelve months to 30
Slide 23: Conclusions (cont'd): Financing & Impact
Conclusions (cont’d) Financing & Impact The Transaction is being financed by equity issued to HPE shareholders representing 50.1% of Micro Focus fully diluted share capital1 at Completion, together with underwritten debt facilitiesGross Debt of $5.5 billion has been underwritten by J.P. Morgan to fu
Slide 24: Appendix: Financial Information
Appendix: Financial Information
Slide 25: Selected Financial Information on HPE Software
Selected Financial Information on HPE Software JPM – pls add financial schedules For the fiscal years ended 31 October LTM Q2 2016 2015 2014 US$m US$m US$m Net Revenues as reported under SEC US GAAP Carveout rules HPE Software Segment $3,412 $3,622 $3,933 Less: MOBU Transfer (56) (163) (232) Disposa
Slide 26: www.microfocus.com
www.microfocus.com
Slide 27: Disclaimer
Disclaimer NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION. This presentation does not constitute or form part of any offer or invitation to sell
Slide 28: Disclaimer (Cont'd)
Disclaimer (Cont’d) Neither this presentation nor the information contained herein constitutes or forms part of an offer to sell or the solicitation of an offer to buy securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from
Slide 29: Disclaimer (Cont'd)
Disclaimer (Cont’d) Subject to any requirement under applicable law, Miami undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Investors should not place undue reliance on forward-looking statements, which s
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