H-P to Snatch Up Opsware

Opsware has lost money every year since it was founded in 1999, posting a $16 million net loss in its most recently-ended year. But the company's sales have grown by more than 60% for the past two years in a row.

Goldman Sachs analyst Laura Conigliaro, who rates H-P a buy, estimated that Opsware should add roughly 2 percentage points to H-P's software group's growth in calendar 2008.

And she said that Opsware's rich profit margins should help H-P's software group attain its profitability target of 18% to 22% in 2008 -- a nice boost from the 8% operating margin that H-P's software division posted in its most recent quarter.

Goldman Sachs makes a market in Hewlett-Packard securities, has managed a public or Rule 144A offering for the company and provided it with investment banking and non-investment banking services in the past 12 months.

In a separate announcement Monday, H-P said it will buy Neoware(NWRE), provider of thin client computing products, for $16.25 a share, or $214 million overall.

Shares of H-P were off 4 cents at $48.50 in midday trading Monday.

The Opsware acquisition will be conducted by means of a tender offer for all outstanding Opsware shares, after which Opsware will merge with an H-P subsidiary. The deal is expected to close before the end of the H-P's fiscal fourth quarter in October subject to certain closing conditions and regulatory approvals.

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