HP to acquire Mercury

HP to acquire Mercury

Summary: As rumored last month, HP is indeed interested in Mercury Interactive, and pulled the trigger today. The price tag--a cash tender offer for $52.

TOPICS: Hewlett-Packard

As rumored last month, HP is indeed interested in Mercury Interactive, and pulled the trigger today. The price tag--a cash tender offer for $52.00 per share, or approximately $4.5 billion. From the press release:

“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.”

Combining HP's OpenView management platform with Mercury's application management and delivery products is a logical fit. EMC was rumored to be looking to acquire Mercury, but instead spent its money on RSA Security last month. The official announcement and conference calls with the players to follow...

Topic: Hewlett-Packard

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  • Yaaawwwnnn!

    *smack, smack, stretch* .......
    Reverend MacFellow
  • Beware of serial acquisitors

    For a company whose slogan is "Invent", HP sure buys a lot of companies. Leads me to believe that they now pay only lipservice to R&D.
    John L. Ries
    • HP has to buy other companies.

      Otherwise, pretty soon there won't be anyone left to lay off.
  • Gee, so is it 5.4 or 4.5 billion?

    Headline says 5.4, story says 4.5. Tell you what, just send the difference to me, k?
  • Another company for HP mgmt to kill

    HP is virtually certain to continue its King Midas in Reverse track record in the software business, with Mercury soon to follow SoftBench, eSpeak, Verifone, and Bluestone to their death. MERQ's revenue of $775M is just barely above roundoff error compared to HP's $89B revenue. I can't imagine that HP's senior management will have much long term interest in such a small opportunity.

    Mercury's governance problems (CEO and CFO resignations) made them an obvious takeover target. This acquisition lets both the old and new management teams cash out. A nice payday for the top Mercury folks, but also the death knoll for another independent software business.
    • Another company for HP mgmt to kill

      it's "death knell" mate, not "death knoll".
    • yup - fingers spazzed - didn't proof carefully

      Grassy knoll - death knell. I certainly know the difference.

      Since you didn't say anything about the message itself, it would appear that you agree that Mercury's products and people won't be around very long once the deal closes.
    • This could be a good thing.

      If you've ever done scaling and performance tuning for an enterprise applications (i.e. a 100 load balanced web servers hitting 20 back office servers with different platforms & technologies) you can see the benefit of combining these. Trying to find the source of a bottleneck can be elusive.

      Mercury is likely losing market share rapidly to Microsoft (i.e. do you spend $2,500 or $175,000 in license fees just to generate a load balanced test load against your web application. The companies I have worked with have either paid for Mercury or don't have the time now to rewrite all their test scripts with Microsoft but have a strategic plan to move there in order to reduce their licensing costs.

      What will kill Mercury is the pricing and Microsoft will probably be the ones to do it. If HP is smart, they will follow the lead of PeachTree Accounting back in the 80's. They were on the verge of bankruptcy selling their mom & pop accounting software for $5-10k. They got a new Pres/CEO who dropped the price to $150 and turned the company around.

      HP could turn this to their advantage with the right price and making for an easy integration with OpenView. Microsoft already has the price but might need to work on the performance measurement and monitoring tools in a heterogenious environemnt in order to match the feature set.