HP Enterprise shares jump more than 10% after announcing spin off plan for services business (HPE)
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HP Enterprise shares went up more than 10% in after hours trading on Tuesday after the company announced plans to spin off its enterprise services unit.
In a statement, HPE said that it will spin-off and merge its enterprise services business with the IT infrastructure services firm CSC, creating a combined entity that would potentially generate $26 billion in annual revenue.
CSC CEO Mike Lawrie will be the CEO, chairman, and president of the combined company, while HPE CEO Meg Whitman will join the company's board.
HPE shareholders will own roughly 50% of the newly combined business, and should expect about $8.5 billion in added value following the deal.
HPE also delivered a strong quarter Tuesday, reporting second quarter revenue of $12.7 billion, up 1% from the same quarter of last year. EPS went up to $0.18 per share from last year's $0.16 per share.
CSC is a Fortune 500 company that provides support for other businesses' IT infrastructure. HPE is the enterprise business of HP, which split into two companies last year.
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