SEC Filing Details HP's Strategy, Expectations Behind Autonomy Acquisition

The Form 8-K, filed Friday, also discloses that Autonomy must pay 70.9 million British Pounds (more than $100 million) to HP should Autonomy back out of the acquisition deal.

Last week HP said it would acquire Cambridge, U.K.-based Autonomy for $10.3 billion in a move designed to boost HP's software offerings. Software accounted for only 3 percent of HP's fiscal 2010 sales.

The Form 8-K provides some insight into the benefits and competitive advantages HP expects to gain when it completes the Autonomy acquisition sometime before the end of 2011.

Autonomy develops information management software including tools for data analysis, database search, information governance, information discovery, records management, data archiving and Web content management. Autonomy's Intelligent Data Operating Layer (IDOL) Server is the core of the company's software products.

"Autonomy's leading IDOL platform combined with HP's strength in complementary products, services and infrastructure will enable the combined business to deliver a next-generation information platform, analytical applications and performance optimization solutions," HP said in the Form 8-K

"Autonomy has a strong position in the $20 billion enterprise information management space, which is growing at 8 per cent annually and is uniquely positioned to continue growth within this space," the document said. "Furthermore, key Autonomy assets would provide HP with the ability to reinvent the $55 billion business analytics software and services space, which is growing at 8 per cent annually."

By acquiring Autonomy HP said it can offer new industry and line-of-business systems, new analytic and optimization platforms and applications, IT performance suite software, information and document processing systems and services, and cloud data management services.

The Form 8-K said the Autonomy acquisition "complements HP's existing technology portfolio," including products and services from the company's imaging and printing group (IPG); and from the enterprise servers, storage and networking group. The Autonomy software "provides IPG a base for content management platforms," the document said, and provides opportunities for HP services in such vertical industries as government, financial services, legal, pharmaceutical and healthcare.

The Form 8-K discloses that under the acquisition agreement Autonomy must pay HP the 70.9 million British Pound "inducement fee" should it accept another acquisition offer or the company's board of directors withdraws from the deal. Both HP and Autonomy's boards have approved the acquisition.