HP Cuts Ties with Autonomy as Micro Focus Buys its Software Business

AurasmaAutonomy, the company behind the Aurasma augmented reality platform, is coming back under British ownership as the result of a deal that will see UK firm Micro Focus buying Hewlett-Packard Enterprises (HPE) software business in a deal worth $8.8bn (£6.6bn). The acquisition will make Micro Focus one of the UKs largest tech firms, with annual revenues of £3.4bn.

HP bought Autonomy in 2011 in a deal that valued the UK firm at $10.7bn (£7.4bn). HP was initially criticized for paying too much for the firm, but subsequently claimed the business had been overvalued due to “accounting improprieties, misrepresentations and disclosure failures” by its previous management. HP subsequently wrote down the value of Autonomy by $8.8bn because of the alleged accounting improprieties, while Autonomy founder Mike Lynch blamed the size of the writedown on HP’s mismanagement of the deal.

A bitter and highly personal legal battle ensued, with HP gunning for Lynch, and Lynch subsequently suing HP for at least $150m in damages over the claims that he artificially inflated the value of the firm. The case was due to resume in London in 2018. Where the Micro Focus deal leaves that is unclear, but many in HP will no doubt be glad to be rid of Autonomy, the sale the latest move in HP chief executive Meg Whitman’s strategy of divesting all but the company’s core assets.