Since Meg Whitman joined Hewlett-Packard in October 2011, the company has only completed one acquisition, a German cloud printing company Hiflex, bought for an undisclosed sum in December of that year.
For most of her tenure as CEO Whitman has been dealing with the repercussions of the acquisition just before that, the $US11 billion purchase of software maker Autonomy, orchestrated by her predecessor Leo Apotheker (though Whitman was on the board of directors at the time). HP took on a boatload of debt to finance the acquisition.
Whitman later admitted HP paid too much and the company wrote-off $US8.8 billion, with HP claiming fraud, saying it it found $US5 billion worth of “accounting improprieties” on Autonomy’s books, a charge that Autonomy’s founder, Mike Lynch, has vehemently denied.
The situation has escalated into investigations by regulators in the U.S. and U.K., the resignation of two of HP’s board members, the replacement of the chairman of the board, and multiple shareholder lawsuits.
Bloomberg reports that HP is currently in talks to try and settle these suits. During a conference call with analysts on Thursday, Whitman and HP CFO Cathie Lesjak warned, multiple times, that HP has set aside a larger chunk of cash than typical to cover litigation some litigation expenses. It hasn’t yet disclosed exactly how much money.
But all of that could mean that HP is finally moving behind the Autonomy disaster.
On Thursday, HP posted a two-in-a-row beat on earnings expectations and said its cash situation is improving. Operating net cash increased by $US1.6 billion, the eighth consecutive quarterly improvement of over $US1 billion, the company said.
So, after a two-year pause, when asked about acquisitions, Whitman said she may need to start shopping again:
“As this market changes very dramatically, you can see that we may need acquisitions in security, big data, mobility and cloud. We will be very judicious. It will be returns based, and I would say it would be small to medium-sized acquisitions, so that’s where we are headed …”
It will be interesting to see what she buys and how much she spends. HP has a long history of spending big bucks on companies and tech it wants including Palm ($1.2 billion), 3PAR ($2.35 billion), ArcSight ($1.5 billion), 3Com ($2.7 billion), EDS ($13.9 billion) and Compaq ($25 billion).