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HP Plan Requires 'Many' Acquisitions

In HP's Sept. 23 call with analysts, HP chairman Raymond Lane indicated that after the Autonomy acquisition, the company would still have a significant amount of work to. He said that though Autonomy was a $1 billion revenue company it could build the "position and the synergies with HP's business, which probably in the future could become a $4 billion or $5 billion or hopefully a $10 billion business." Lane, however, downplayed the notion that through Autonomy and a P.C. spinoff the company would transform itself. "Hopefully, we'll see a bigger software portfolio and we'll see more value-added services at HP, but we have $120 billion of hardware business that we care dearly about," Lane said.

One hitch to a shopping spree; however is cash. If the HP board and Whitman, who on Tuesday said that HP will make a decision on its PSG business by the end of the month, decide to keep P.C.'s there won't be loads of cash to spend on acquisitions. Analysts Kugele and Fidacaro say no. "If they keep the PSG business it will be hard to grow a software unit," said Fidacaro. "Their balance sheet doesn't support large acquisitions anymore," Kugele added.

-- Written by Antoine Gara in New York

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