In a strategic move to bolster its position in the networking market, Hewlett Packard Enterprise (HPE) and Juniper Networks, Inc. (JNPR), a leader in AI-native networks, have announced a definitive agreement for HPE to acquire Juniper in an all-cash transaction valued at approximately $14 billion. The acquisition, set at $40.00 per share, represents a significant premium of approximately 32% to Juniper’s unaffected closing price on January 8, 2024.
The synergy between HPE and Juniper is expected to accelerate HPE’s long-term revenue growth, expanding both gross and operating margins. The move aligns with HPE’s strategy of shifting towards higher-growth solutions and strengthening its high-margin networking business. The transaction is anticipated to be accretive to non-GAAP EPS and free cash flow within the first year post-close.
This acquisition is poised to double HPE’s networking business, creating a powerhouse with a comprehensive portfolio to meet the rising demand for secure, unified technology solutions. With the proliferation of AI and hybrid cloud-driven businesses, the combined company aims to offer innovative networking solutions connecting edge to cloud, capitalizing on HPE’s focus on AI workloads.
The strategic benefits of the deal include a compelling pro forma financial profile, positioning HPE for long-term growth, and expanding its total addressable market. Juniper CEO Rami Rahim will lead the combined HPE networking business, reporting to HPE President and CEO Antonio Neri.
Neri stated, “This transaction will strengthen HPE’s position at the nexus of accelerating macro-AI trends, expand our total addressable market, and drive further innovation for customers.” Rahim expressed optimism, stating, “By joining HPE, I believe we can accelerate the next phase of our journey.”
The transaction is expected to close in late calendar year 2024 or early calendar year 2025, subject to regulatory approvals, approval of the transaction by Juniper shareholders, and satisfaction of other customary closing conditions. Upon completion, the combined company will focus on delivering secure, end-to-end AI-native solutions and driving innovation in networking for enterprise, service provider, and cloud customers.
J.P. Morgan Securities LLC and Qatalyst Partners serve as HPE’s financial advisors. Committed financing for the transaction has been provided by Citigroup Global Markets Inc., JPMorgan Chase Bank, N.A., and Mizuho Bank, Ltd. Legal counsel is provided by Wachtell, Lipton, Rosen & Katz, Covington & Burling LLP, and Freshfields Bruckhaus Deringer LLP for HPE, and Goldman Sachs & Co. LLC and Skadden, Arps, Slate, Meagher & Flom for Juniper.
HPE and Juniper will host a conference call to discuss the announcement on January 10, 2024, at 7:30 a.m. CT (8:30 a.m. ET). The call will be accompanied by a slide presentation, and participants are encouraged to view it via webcast at www.hpe.com/investor/HPE-To-Acquire-Juniper-Conference-Call
HPE is a global edge-to-cloud company providing technology solutions as a service. With offerings in Cloud Services, Compute, High-Performance Computing & AI, Intelligent Edge, Software, and Storage, HPE aims to help organizations accelerate outcomes by unlocking value from their data.
Juniper is committed to simplifying network operations and delivering superior user experiences. Their solutions focus on providing industry-leading insight, automation, security, and AI to drive tangible business results. For more information, visit https://www.juniper.net/ or connect with Juniper on X (formerly Twitter), LinkedIn, and Facebook.
